Which of the Following Is Not Added to Net Income

question 146

Multiple Choice

Which of the following is not added to net income as an adjustment to reconcile net income to cash from operating activities on the statement of cash flows?

• A)Increase in an accrued liability
• B)Amortization of discount on bond payable
• C)Loss on sale of operational asset
• D)Increase in deferred tax asset
• E)None of these answers is correct.

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Definitions:

Straight-line Method

A method of calculating depreciation whereby an asset's cost is evenly spread over its useful life.

Salvage Value

The estimated residual value of an asset at the end of its useful life, often considered for depreciation calculations.

Useful Life

The estimated duration a fixed asset is expected to be economically usable, with normal repairs and maintenance, for it to generate revenue.

Leasehold Improvements

Enhancements made to rental premises by a tenant, such as additions or renovations, which typically revert to the landlord upon lease termination.