Which of the Following Would Be Added to Net Income

question 198

Multiple Choice

Which of the following would be added to net income using the indirect method?

• A) An increase in accounts receivable
• B) An increase in prepaid expenses
• C) Depreciation expense
• D) A decrease in accounts payable

---

Definitions:

Invested Assets

Assets that a company or individual allocates resources toward with the expectation of generating a future benefit or income.

Maximum Return

The highest possible profit or gains that can be achieved from an investment or business venture.

Income From Operations

The profit realized from a business's ongoing operations, excluding any income derived from investments or extraordinary one-time events.

Residual Income

The amount of income that remains after all personal debts and expenses have been paid.