Which of the Following Should Be Added to Net Income

question 125

Multiple Choice

Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

• A) a gain on the sale of land
• B) a decrease in accounts payable
• C) an increase in accrued expenses
• D) dividends paid on common stock

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Definitions:

Annual Contributions

Yearly monetary additions made to retirement savings plans, investment accounts, or other savings vehicles.

Taxable Amount

The portion of income, withdrawals, or distributions subject to tax.

Annuity Payment

Periodic payments received from an annuity contract, usually for retirement income, which can be fixed or variable in amount.

Roth IRA Withdrawals

Withdrawals from a Roth Individual Retirement Account that can be tax-free if certain conditions are met, such as the account being open for at least five years and occurring after the age of 59½.