When the Indirect Method Is Used,if a Prepaid Expense Account

question 132

Multiple Choice

When the indirect method is used,if a prepaid expense account increases during the accounting period,the change in the prepaid expense account is:

• A)added to the change in the cash account.
• B)added to net income.
• C)subtracted from net income.
• D)subtracted from the change in the cash account.

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Definitions:

Federal District Courts

The trial courts of the United States federal court system where civil and criminal cases are initially filed and adjudicated.

Collateral Matters

Topics or issues that are indirectly related to the main subject at hand.

Obligation

A legal or moral duty to do or not do something, often arising from a contract or promise.

Debtor

An individual or entity that owes a debt to another party, typically as a result of borrowing money or failing to pay for goods or services received.