Starting with Net Income and Adjusting It for Items That

question 117

Multiple Choice

Starting with net income and adjusting it for items that affected reported net income but which did not affect cash is called the

• A) direct method.
• B) indirect method.
• C) working capital method.
• D) cost-benefit method.

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Definitions:

Equity Investments

Financial contributions made into companies by purchasing shares in order to gain partial ownership and potentially share in the profits.

Distribution Sources

Channels or intermediaries through which products or services are made available to consumers.

Franchisor

A business entity that grants a license to a third party for the conducting of a business under the franchisor's marks, name, and business model.

Franchise Agreement

A legal contract between a franchisor and franchisee, outlining the terms for operating a franchised business.