When Preparing a the Operating Section of the Statement of Cash

question 83

Multiple Choice

When preparing a the operating section of the statement of cash flows using the indirect method,which of the following items are added to net income?

• A)decrease in accounts payable
• B)unrealized gains on trading securities
• C)loss on sale of equipment
• D)increase in merchandise inventory

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Definitions:

Daily Wages

Compensation based on the number of days worked, typically paid to temporary or contract workers.

Depreciation Expense

The allocated reduction in the cost of tangible fixed assets over their useful life for accounting and tax purposes.

Office Supplies

Items and materials used in an office for writing, printing, filing, and general functionality, including paper, pens, and office equipment.

Fees Accrued

Accrued fees are costs that have been incurred for services but have not yet been paid by the end of an accounting period.