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

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Definitions:

Net Sales

The amount of sales revenue left after deducting sales returns, allowances, and discounts from the total gross sales.

Cost of Goods Sold

An expense measured as the total direct costs attributable to the production of goods sold by a company.

Departments

Distinct divisions within a company or organization designated to handle specific tasks or functions, such as sales, marketing, or human resources.

Catering Department

A division within a company or a facility that is responsible for providing food services for events, meetings, and functions.