Which of the Following Adjustments to Convert Net Income to Net

question 167

Multiple Choice

Which of the following adjustments to convert net income to net cash provided by operating activities is not added to net income?

• A)Gain on Disposal of Equipment.
• B)Depreciation Expense.
• C)Patent Amortization Expense.
• D)Depletion Expense.

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Definitions:

Proportion of Defectives

The fraction or percentage of units in a batch or production lot that are considered to be non-conforming or defective, typically used in quality control and manufacturing processes.

Upper and Lower Control Limits

The thresholds in control charts within which a process is considered to be in control and stable, with the Upper Control Limit being the maximum acceptable limit and the Lower Control Limit the minimum.

Assignable Cause Variation

Variation in a process that is caused by specific, identifiable factors, as opposed to random variation.

Special Cause Variation

Variation in a process that is caused by specific circumstance, which is non-random and can usually be identified and eliminated.