Which of the Following Would NOT Be an Adjustment to Profit

question 60

Multiple Choice

Which of the following would NOT be an adjustment to profit using the indirect method?

• A) depreciation expense
• B) an increase in prepaid insurance
• C) an increase in inventories
• D) an increase in land

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Definitions:

Flexible Budget

A financial plan that is designed to change in response to the level of activity achieved.

Spending Variance

The difference between the actual amount spent and the budgeted amount for a period.

Employee Salaries and Wages

The payment made to employees for their services, either calculated hourly (wages) or over a fixed period (salaries).

Spending Variance

The difference between the actual amount spent and the budgeted amount for a particular period or category in financial management.