Which One of the Following Is Subtracted from Net Income

question 50

Multiple Choice

Which one of the following is subtracted from net income in determining cash flows from operations?

• A) Increase in prepaid insurance
• B) Increase in accounts payable
• C) Decrease in accounts receivable
• D) Decrease in prepaid insurance

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Definitions:

Job Order Cost Accounting

A system used to calculate the costs associated with a specific job or order, tracking direct labor, direct materials, and overhead.

Service Business

A type of business that provides intangible products or services to its customers rather than selling physical goods.

Factory Overhead Rate

A calculation used in manufacturing to allocate indirect costs, such as utilities and rent, to individual units of production.

Processing Departments

Divisions or areas within a factory where specific stages of production are completed, often part of a cost accounting system to track expenses and efficiency.