Which of the Following Is an Incorrect Statement of One

question 26

Multiple Choice

Which of the following is an incorrect statement of one of the rules for converting net income to the cash flow from operating activities using the indirect method?

• A)Increases in current assets are subtracted from net income.
• B)Decreases in current assets are added to net income.
• C)Noncash revenue and gains are added to net income.
• D)Increases in current liabilities are added to net income.

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Definitions:

Disposable Income

Income available to households after accounting for taxes and social security charges, available for spending or saving.

Gross Domestic Product

The total market value of all final goods and services produced within a country in a specific time period.

Aggregate Expenditure

This is the total spending on final goods and services in an economy, including consumption, investment, government purchases, and net exports.

Disposable Income

The budget households have for expenses and savings after income tax deductions.