All of the Following May Appear as an Adjustment of Net

question 83

Multiple Choice

All of the following may appear as an adjustment of net income when preparing the statement of cash flows using the indirect method EXCEPT:

• A)payment of cash dividends.
• B)depreciation expense.
• C)loss on sale of long-term assets.
• D)an increase in accounts payable.

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Definitions:

Decentralization

The distribution of decision-making powers and authority away from a central location or authority to local or individual actors.

Authority

The legal or rightful power or right to make decisions, give orders, and enforce rules within a particular scope or role.

Operating Decisions

Choices made by management regarding the day-to-day operations of a business, such as pricing, inventory management, and employment levels.

Profit Center

A decentralized unit in which the manager has the responsibility and the authority to make decisions that affect both costs and revenues (and thus profits).