Which of the Following Adjustments to Convert Net Income to Net

question 112

Multiple Choice

Which of the following adjustments to convert net income to net cash provided by operating activities is incorrect?
$\begin{array}{lll}&\text {\quad\quad\quad\quad\quad\quad\quad Add to Net Income }&\text { Deduct from Net Income }\\\end{array}$

• A)\(\begin{array}{lll}\text { Accounts Receivable } & \text {\quad decrease } & \text {\quad\quad increase } \\\end{array}\)
• B)\(\begin{array}{lll}\text { Prepaid Expenses } & \text {\quad\quad increase } & \text {\quad\quad\quad decrease } \\\end{array}\)
• C)\(\begin{array}{lll}\text { Inventory } & \text {\quad\quad\quad\quad\quad decrease } & \text {\quad\quad\quad increase } \\\end{array}\)
• D)\(\begin{array}{lll}\text { Accounts Payable } & \text {\quad increase } & \text {\quad\quad\quad\quad decrease }
• \end{array}\)

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Definitions:

Industrial Nations

Industrial Nations are countries with significant levels of industrialization and higher standards of living.

Edward Denison

An American economist known for his work on measuring the sources of economic growth.

Productivity Growth

An increase in the output of goods and services per unit of input, reflecting improvements in efficiency, technology, or processes.

Productivity

A measure of the efficiency of production, often quantified as the amount of output per unit of input.