Which of the Following Should Be Added to Net Income

question 69

Multiple Choice

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

• A) a gain on the sale of land
• B) a decrease in accounts payable
• C) an increase in accrued liabilities
• D) dividends paid on common stock

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Definitions:

Machining Department

A specific section or unit of a manufacturing facility where machining processes, such as drilling, milling, or turning, are carried out.

Manufacturing Overhead

All indirect costs associated with manufacturing a product, like utilities, maintenance, and salaries of support staff.

Assembly Department

A segment of a manufacturing firm where components are put together to form a finished product.

Departmental Predetermined Overhead Rates

The overhead rates assigned to specific departments based on estimated costs and activity levels, used for allocating overhead to products.