Of the Following,which Would Be Added Back to Net Income

question 30

Multiple Choice

Of the following,which would be added back to net income in the operating section of a cash flow statement using the indirect method?

• A)Increase in inventory
• B)Decrease in Accounts Payable
• C)Increase in Accounts Receivable
• D)Decrease in Prepaid Insurance

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Definitions:

Net Operating Income

The total profit of a company after operating expenses have been subtracted from total revenue, but before deducting taxes and interest.

Traceable Fixed Expenses

Fixed costs that can be directly linked to a specific product, department, or segment of a business.

Variable Expenses

Costs that change in proportion to the activities or volume of a business.

Net Operating Income

A measure of a company's profitability from its regular business operations, excluding expenses and revenues that are unrelated to the primary business activities.