Which of the Following Adjustments to Net Income Is NOT

question 4

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

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Definitions:

Cyclical Effect

Phenomenon where certain patterns, trends, or behaviors recur over regular periods due to underlying seasonal or economic cycles.

Forecast Quarterly

The process of predicting future values of a variable or interest, such as sales or revenue, specifically for each quarter of a year.

Percentage of Trend

A measure used to describe the proportion of a trend in a dataset, often used in analyzing time series data to determine growth or decline percentages over a time period.

Percentage of Trend

A statistical measure that quantifies the relative change of a variable over a specific period, often used to analyze patterns or growth rates.