Which of the Following Should Be Deducted from Net Income

question 177

Multiple Choice

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

• A) a decrease in inventory
• B) a decrease in accounts payable
• C) preferred dividends declared and paid
• D) a decrease in accounts receivable

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Definitions:

Precedent

A legal principle or rule established in a previous court decision that is either binding or persuasive for a court when deciding subsequent cases with similar issues or facts.

Critical-Thinking Skills

The ability to understand the structure and worth of an argument by evaluating the facts, issue, reasons, and conclusion of the argument.

Absolute Skills

A term not typically used in a standard context to describe specific competencies; therefore, its meaning might vary across different fields. Generally, it may refer to fundamental or essential skills possessed without conditions. However, if not recognized widely, consider it as NO.

Constitutions

The fundamental principles or established precedents by which a state or other organization is governed, typically a written document outlining the powers of government and the rights of the governed.