Starting with Net Income and Adjusting It for Items That

question 59

Multiple Choice

Starting with net income and adjusting it for items that affected reported net income but not cash is called the

• A) direct method.
• B) indirect method.
• C) working capital method.
• D) cost-benefit method.

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Definitions:

Cosurety

One of two or more individuals or entities jointly responsible for fulfilling the obligation of a surety, sharing liability for ensuring the performance or payment of an obligation.

Right of Contribution

The legal right of a defendant or debtor to collect from co-defendants or co-debtors their share of a common liability or debt.

Right of Subrogation

is a legal right allowing one party to assume another's rights in order to pursue recovery from a third party responsible for a loss.

Debtor's Surety

An individual or entity that guarantees the debt of a borrower, agreeing to be responsible for the repayment if the debtor fails to settle the debt.