Which of the Following Items Is Subtracted from Net Income

question 10

Multiple Choice

Which of the following items is subtracted from net income when using the indirect method of calculating cash flows provided by operating activities?

• A)A decrease in accounts receivable
• B)Depreciation expense
• C)A decrease in salaries payable
• D)A loss on the sale of equipment

Describe the significance and calculation of the quality and turnover of receivables.

Calculate interest on notes payable and receivable.

Understand the effects of accounts receivable transactions on a company’s financial statements, including write-offs and recoveries.

Perform calculations related to the sales and purchase transactions involving notes receivable and payable.

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Definitions:

Extinction Learning

A process in cognitive psychology and behavioral therapy where a conditioned response gradually diminishes and eventually disappears as the conditioned stimulus is no longer paired with an unconditioned stimulus.

Generalized Learning

The process through which skills or knowledge learned in one context or situation are applied to different but related contexts or situations.

Punishment

A process in behavior analysis and modification, involving the application of an unpleasant stimulus or removal of a desirable stimulus to decrease a behavior.

Negative Reinforcement

A process in which a behavior increases because it removes or diminishes a negative condition.