In Preparing Cash Flows Provided by Operating Activities Using the Indirect

question 28

Multiple Choice

In preparing cash flows provided by operating activities using the indirect method, which of the following items is added to net income?

• A)Non-cash expenses such as depreciation
• B)Gains on investing and financing transactions
• C)Increases in current asset balances
• D)Decreases in current liability balances

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Definitions:

Net Income

Profit of a company after all expenses, including taxes and costs, have been subtracted from total revenue.