Which of the Following Items Is Deducted from Net Income

question 75

Multiple Choice

Which of the following items is deducted from net income to arrive at cash flow from operations when using the indirect method?

• A) depreciation expense
• B) amortization expense
• C) decrease in accounts receivable
• D) decrease in accounts payable

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Definitions:

Output Level

The quantity of goods or services produced by a company, industry, or economic system at a given time.

Average Revenue

The amount of income generated per unit of sale or the total revenue divided by the quantity of products or services sold.

Marginal Revenue

The income boost obtained through the sale of one extra unit of a product or service.

Pure Competition

A market structure characterized by an extremely high level of competition, where no single buyer or seller can influence the market price.