A Company Uses the Indirect Method to Prepare the Statement

question 90

Multiple Choice

A company uses the indirect method to prepare the statement of cash flows.Which of the following items would be subtracted from net income in determining the net cash flow from operating activities?

• A)Amortization of a premium on bonds payable would be subtracted from net income.
• B)An increase in dividends payable would be subtracted from net income.
• C)A loss on the sale of equipment would be subtracted from net income.
• D)Depreciation expense would be subtracted from net income.

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Definitions:

Grocery Store

A retail store that primarily sells food, both fresh and packaged, along with various household items.

Willingness To Pay

The maximum amount an individual is prepared to spend to procure a good or service.

Charge Customers

The act of requesting payment from consumers for goods or services provided.

Bundled Price

A pricing strategy where multiple products or services are sold together at a single, combined price, often at a discount to purchasing them separately.