Under the Indirect Method, Which of the Following Items Would

question 38

Multiple Choice

Under the indirect method, which of the following items would be subtracted from net income to determine the cash flow from operating activities?

• A)Loss on the sale of equipment
• B)Increase in the balance of Accounts Receivable
• C)Increase in Accrued Interest Payable
• D)Depreciation expense

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Definitions:

Total Losses

The complete financial loss amount suffered by an entity, typically used in insurance when referring to a loss where the insured item is totally damaged or destroyed.

Security Guards

Personnel employed to protect property, assets, or people, often found in various establishments or public areas.

Substitution Effect

The change in consumption patterns due to a change in relative prices, leading consumers to substitute one good for another more or less expensive one.

Firms

Business organizations that produce goods or offer services, typically with the aim of generating profit.