Which of the Following Adjustments Net Income Is NOT Correct

question 38

Multiple Choice

Which of the following adjustments net income is NOT correct if you want to calculate cash flow from operating activities?

• A)Add back depreciation
• B)Add increases in accounts payable
• C)Add increases in accounts receivable
• D)Deduct increases in inventory

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Definitions:

Uniform Commercial Code

A comprehensive set of laws regulating commercial transactions and dealings across the United States, aiming for uniformity among states.

Article 2

Refers to a particular segment of a legal code or document, which could vary significantly by context, often involved in discussing commercial transactions in the U.S. Uniform Commercial Code.

United Nations Convention

An international treaty adopted under the auspices of the United Nations, on various global issues ranging from human rights to environmental protection.

International Sales

Transactions involving the sale of goods between parties located in different countries.