Which of the Following Would Be Added to Net Income

question 139

Multiple Choice

Which of the following would be added to net income when determining cash flows from operating activities under the indirect method?

• A) A gain on the sale of land.
• B) An increase in prepaid expenses.
• C) A decrease in accounts payable.
• D) A decrease in accounts receivable.

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Definitions:

Budget Constraint

A representation of all the combinations of goods and services that a consumer can afford with a fixed income and prices.

Indifference Curve

A graph representing different bundles of goods between which a consumer is indifferent, showing combinations that give the consumer the same level of satisfaction.

Income

The amount of money or its equivalent received during a period of time in exchange for labor, goods, or services, or as profit on capital.

Indifference Curves

Graphical representations in economics showing combinations of goods among which a consumer is indifferent, helping to analyze consumer choices.