Which of the Following Should Be Deducted from Net Income

question 25

Multiple Choice

Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method?

• A) A decrease in inventory
• B) A decrease in accounts payable
• C) Preferred dividends declared and paid
• D) A decrease in accounts receivable

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Definitions:

Withdrawals

Money or assets taken out from a business by its owner for personal use or from a bank account by the account holder.

Investments

Assets acquired with the goal of generating income or increasing in value over time.

Statement Of Owner's Equity

A financial statement detailing changes in the equity of a company's owner over a reporting period.

Capital Changes

Adjustments or alterations in the equity or ownership capital of a company, often due to investments, dividends, or profits.