Which of the Following Would Be Deducted from Net Income

question 6

Multiple Choice

Which of the following would be deducted from net income when determining cash flows from operating activities under the indirect method?

• A)An increase in accounts payable.
• B)Depreciation expense.
• C)A decrease in prepaid insurance.
• D)A gain on the sale of a depreciable asset.

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Definitions:

Sesamoid

A type of bone embedded within a tendon or muscle, usually found in locations where a tendon passes over a joint, such as the kneecap.

Acromioclavicular Joint

A joint at the top of the shoulder where the acromion of the scapula and the clavicle meet.

Suprascapular Notch

A notch in the scapula that allows passage of the suprascapular nerve and vessels.

Acetabulum

The socket in the hip bone that receives the head of the thigh bone to form the hip joint.