How Is Net Income Adjusted for Pension Costs Under the Indirect

question 174

Multiple Choice

How is net income adjusted for pension costs under the indirect method?

• A)+ pension expense - cash contributions
• B)+ pension expense + cash contributions
• C)- pension expense + cash contributions
• D)None of these

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Definitions:

Units

A standard quantity of a product, used in various contexts such as measurement, accounting, or inventory control.

Variable Costing

A management accounting method that includes only variable production costs (direct materials, direct labor, and variable manufacturing overhead) in the cost of goods sold.

Net Cash Flow

The amount of money being transferred in and out of a business, reflecting the company's operating, investing, and financing activities over a period.

Absorption Costing

A cost accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.