Which of the Following Adjustments to Net Income Is Not

question 62

Multiple Choice

Which of the following adjustments to net income is not correct if you are trying to calculate cash flow from operating activities?

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

---

Definitions:

Psychological Contract

The unwritten, informal commitments and expectations between an employer and an employee, beyond the formal employment contract.

Procedural Justice

The fairness of the processes that lead to outcomes or decisions, particularly in the context of legal or organizational settings.

Distributive Justice

A principle concerned with the fair allocation of resources and benefits among members of a society or an organization.

Performance

The level of achievement or output that an employee demonstrates in their job duties over a certain period.