Under the Indirect Method, Which of the Following Is NOT

question 43

Multiple Choice

Under the indirect method, which of the following is NOT a proper adjustment to net income to arrive at net cash flow from operations?

• A) Adding a decrease in inventory
• B) Adding an increase in prepaid expense
• C) Adding an increase in salaries payable
• D) All are proper adjustments to net income.

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Definitions:

Degrees of Freedom

The number of independent values or quantities which can be assigned to a statistical distribution or parameter estimate, impacting the shape and scale of the distribution.

Rule of 5

An empirical rule suggesting that a sample of size five is often sufficient for capturing the median of a population, specifically under conditions reflected in the five-number summary.

Independent Events

Two or more events whose occurrence or outcome does not affect one another.

Multinomial Experiment

An experiment consisting of a fixed number of trials where each trial has multiple possible outcomes and the trials are independent.