Which of the Following Is Not an Adjustment When Arriving

question 98

Multiple Choice

Which of the following is not an adjustment when arriving at net cash flow from operating activities under the indirect method?

• A) Noncash expenses, such as depreciation expense
• B) Gains and losses on the sale of long-term assets
• C) Changes in a company's long-term assets
• D) Changes in noncash current assets and current liability accounts

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Definitions:

Modified Cash Basis

It is an accounting method that combines elements of the cash basis and accrual basis, recording income when received but expenses when incurred.

Research and Development

This is a set of activities intended to improve existing products or services or to create new ones, often involving scientific or technological innovation.

Straight-Line Depreciation

An approach to evenly spread out an asset's expense over its lifespan.