Under the Indirect Method of Cash Flow, Which of the Following

question 116

Multiple Choice

Under the indirect method of cash flow, which of the following adjustments would NOT be made to net income when computing cash from operating activities?

• A)Add an increase in Accounts Payable
• B)Add Depreciation Expense
• C)Add a decrease in Accounts Payable
• D)Subtract the gain on sale of land

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Definitions:

Consumption Bundle

A specific collection of goods and services consumed by an individual or household.

Farmer's Market

A marketplace where farmers sell their produce directly to consumers, often featuring fresh, locally grown fruits, vegetables, meats, and other products.

Optimal Consumption

The point at which an individual's utility from consuming goods and services is maximized, given their budget constraints.

Budget Constraint

Denotes the limit on the consumption bundles that a consumer can afford given their income and the prices of goods.