When Adjusting Net Income to Cash Using the Indirect Method

question 70

Short Answer

When adjusting net income to cash using the indirect method describe how each of the following should adjust net income.Added (+),Subtracted (-)or No Adjustment (N
A).
_____ 1.Increases in Accounts Receivable
_____ 2.Gain on Sale of Equipment
_____ 3.Decrease in Accounts Payable
_____ 4.Depreciation Expense
_____ 5.Increase in Land account
_____ 6.Decrease in Inventory
_____ 7.Decrease in Dividend Payable
_____ 8.Increase in Prepaid Insurance
_____ 9.Decrease in Discount on Bonds Payable
_____10.Decrease in Salaries Payable

• A).
• _____ 1.Increases in Accounts Receivable
• _____ 2.Gain on Sale of Equipment
• _____ 3.Decrease in Accounts Payable
• _____ 4.Depreciation Expense
• _____ 5.Increase in Land account
• _____ 6.Decrease in Inventory
• _____ 7.Decrease in Dividend Payable
• _____ 8.Increase in Prepaid Insurance
• _____ 9.Decrease in Discount on Bonds Payable
• _____10.Decrease in Salaries Payable

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Definitions:

Sample Points

Individual pieces of data or observations collected from a sample that are used for analysis.

Experiment

A procedure carried out under controlled conditions to discover an unknown effect, to test a hypothesis, or to illustrate a known effect.

Mutually Exclusive

A condition where two events cannot occur at the same time; the occurrence of one event excludes the possibility of the other event occurring.

Sample Points

Individual elements or observations selected from a population for the purpose of statistical analysis.