Using the Indirect Method,which of the Following Would Not Be

question 83

Multiple Choice

Using the indirect method,which of the following would not be added to net income?

• A)An increase in Equipment.
• B)A decrease in Prepaid Insurance.
• C)An increase in Salaries and Wages Payable.
• D)A decrease in Supplies.

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Definitions:

Ordinary Annuity

A series of equal payments made at regular intervals (e.g., annually, monthly).

Executory Costs

Expenses incurred in maintaining the terms of a lease, typically including insurance, maintenance, and taxes paid by the lessee.

Guaranteed Residual Value

The assured value that an asset will have at the end of its lease term, guaranteed by a party, often the lessee or manufacturer.

Bargain Purchase Option

An option in a lease agreement that allows the lessee to purchase the leased asset at a price significantly below its fair market value at the end of the lease term.