Which of the Following Is an Adjustment That Would Need

question 77

Multiple Choice

Which of the following is an adjustment that would need to be made to net income when calculating cash flows from operations under the indirect method?

• A) Subtract amortization expense
• B) subtract gain on sale of subsidiary
• C) add an increase in accounts receivable
• D) add a decrease in accounts payable

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Definitions:

Interest-Rate Cost of Borrowing

The cost associated with borrowing funds, typically expressed as a percentage of the amount borrowed.

R&D Expenditure

Funds allocated by a business or government towards research and development projects to innovate or improve products or services.

Added Profit

The additional profit generated from an activity or investment beyond the usual or expected return.

Expected-Rate-of-Return-Curve

A graphical representation that shows the relationship between the expected return on investment and the level of investment risk.