Which of the Following Should Be Added to Net Income

question 42

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) depreciation expense
• B) an increase in inventory
• C) a gain on the sale of equipment
• D) dividends declared and paid

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Definitions:

Toe-out

A wheel alignment term where the front of the wheels are pointed slightly outward, which can affect handling and tire wear.

Steering Control Arm

The forged link that connects a drag link to the steering knuckle. Also known as a steering arm and a control arm.

Neutralize Suspension

Adjusting or setting a vehicle's suspension system to a neutral position, optimizing balance and performance.

Front End Geometry

The arrangement and angles of the front wheels and suspension components of a vehicle, critical for ensuring proper steering and vehicle stability.