Which of the Following Is Subtracted from Net Income Under

question 8

Multiple Choice

Which of the following is subtracted from net income under the indirect method to determine net cash provided/(used) by operating activities?

• A)Loss on sale of equipment
• B)Decrease in prepaid insurance
• C)Increase in merchandise inventory
• D)Increase in accounts payable

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Definitions:

Relative Magnitude

The perceived size or importance of one quantity in comparison to another.

Colored Part

This term is vague but could be referring to the iris, which is the colored part of the eye responsible for controlling the size of the pupil.

Pupil

The black circular opening in the iris of the eye, which regulates the amount of light that enters the eye.

Iris

The colored part of the eye surrounding the pupil, controlling the amount of light that enters the eye by adjusting the size of the pupil.