Which of the Following Would Be Added to Net Income

question 79

Multiple Choice

Which of the following would be added to net income in the operating activities section of a statement of cash flows prepared using the indirect method?

• A) a decrease in accounts receivable.
• B) an increase in prepaid expenses.
• C) a decrease in accrued liabilities.
• D) an increase in property, plant and equipment.

---

Definitions:

LIFO

Last In, First Out (LIFO) is an inventory valuation method which assumes that the most recently produced items are the first to be sold.

Units

In accounting and finance, refers to a measure of quantity or volume of production or inventory.

Specific Identification

An inventory costing method in which costs are assigned to individual items or batches of items, not to inventory as a whole.

Cost of Goods Sold

This refers to the aggregate expense involved in creating a product that a company sells, including direct labor, material costs, and direct factory overhead.