Which One of the Following Below Should Be Added to Net

question 143

Multiple Choice

Which one of the following below should be added to net income in calculating net cash flow from operating activities using the indirect method?

• A) a gain on the sale of land
• B) a decrease in accounts payable
• C) an increase in accrued liabilities
• D) dividends paid on common stock

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Definitions:

Debt Financing

Raising funds for business activities by borrowing money, typically through loans or by issuing bonds.

Return on Total Assets

A financial ratio that measures a company's profitability relative to its total assets, indicating how efficiently it uses those assets to generate profit.

Net Income

The total earnings of a company after subtracting all expenses from revenue.

Interest Expense

The cost incurred by an entity for borrowed funds, represented as the interest payable on any type of debt.