Which of the Following Statements Is Incorrect Regarding the Use

question 145

Multiple Choice

Which of the following statements is incorrect regarding the use of the indirect method when preparing the operating activities of the statement of cash flows?

• A)A decrease in Accounts Payable is deducted from net income
• B)A decrease in Prepaid Insurance is added to net income
• C)Gain on the retirement of bonds is deducted from net income
• D)Depreciation expense is subtracted from net income

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Definitions:

Shorthand

A method of rapid writing by using symbols or abbreviations for words or phrases, traditionally used for taking notes or transcribing speeches.

Symbols

Are concrete objects or abstract terms that represent something else.

Abstraction Process

In thought or analysis, the method of isolating or separating properties or qualities from concrete realities to consider them independently.

Personal Terms

These terms relate to aspects or items specifically associated with or pertaining to an individual.