Which of the Following Is an Addition to Net Income

question 55

Multiple Choice

Which of the following is an addition to net income when the indirect method is used?

• A)An increase in inventory
• B)A loss on sale of equipment
• C)A decrease in accounts payable
• D)An increase in accounts receivable

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Definitions:

Prime Rate

The interest rate that banks charge their most creditworthy customers.

Loan Repayment

The process through which a borrower returns borrowed money to the lender, usually in scheduled installments.

Commercial Paper

An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts payable and inventories, and meeting short-term liabilities.

Issue Date

The date on which a document, such as a check, bond, or stock, is issued or goes into effect.