Which of the Following Items Would Be Subtracted from Net

question 60

Multiple Choice

Which of the following items would be subtracted from net income when using the indirect method of calculating cash flows provided by operating activities?

• A)A decrease in accounts receivable
• B)Depreciation expense
• C)A decrease in salaries payable
• D)A loss on the sale of equipment

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Definitions:

Journalizing

The act of recording financial transactions in a company's journal, detailing the accounts that are affected and in which direction.

Posting Process

The act of recording financial transactions in the appropriate accounts within the general ledger.

Debit or Credit Posting

The act of recording an entry on the left (debit) or right (credit) side of a financial account in the accounting ledger.

Trial Balance

An organized accounting sheet where the sum of all ledger balances is equally distributed between debit and credit columns.