Which of the Following Should Be Added to Net Income

question 27

Multiple Choice

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

• A) an increase in inventory
• B) a decrease in accounts payable
• C) preferred dividends declared and paid
• D) a decrease in accounts receivable

---

Definitions:

Energy

The capacity to do work, manifested in physical forms such as heat, light, motion, and chemical energy, crucial to all aspects of life and industry.

Forests

Large areas covered chiefly with trees and undergrowth, considered in economic terms as a resource for timber, recreation, and ecological benefits.

Elephants

Large mammals found in Africa and Asia known for their intelligence, long trunks, and large ears.

Private Property

The right of private persons and firms to obtain, own, control, employ, dispose of, and bequeath land, capital, and other property.