The Extent to Which a Firm Adjusts Net Income for Changes

question 107

Multiple Choice

The extent to which a firm adjusts net income for changes in noncurrent assets and noncurrent liabilities in deriving cash flow from operations under the indirect method depends on the nature of its operations.Firms that decrease in size will usually show

• A)additions or subtractions for losses and gains on the disposal of assets.
• B)additions, only for gains on the disposal of assets.
• C)subtractions, only for losses on the disposal of assets.
• D)no adjustment for losses and gains on the disposal of assets.
• E)none of the above

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Definitions:

Uniform Commercial Code

A set of laws that are intended to harmonize sales and commercial transactions across the United States.

Banks

Financial institutions licensed to receive deposits and provide loans, along with other financial services.

Considered

Thoughtfully evaluated or contemplated before making a decision or judgment.

Misspelled Name

An error in the way a name is written, which could affect legal documents or official records.