Which of the Following Is Added to Net Income as an Adjustment

question 100

Multiple Choice

Which of the following is added to net income as an adjustment under the indirect method of preparing the statement of cash flows?

• A) Salaries payable decrease.
• B) Gain on the sale of land.
• C) Loss on the sale of equipment.
• D) Accounts receivable increase.

---

Definitions:

Financial Statements

Official records that detail the financial activities and condition of a business, including income statement, balance sheet, and cash flow statement.

Retained Earnings

The portion of a business’s profits not distributed to shareholders, instead reinvested in the business or kept for reserve.

Cash Dividends

Payments made by a corporation to its shareholder members in the form of cash.

Stock Dividends

A dividend payment made to shareholders in the form of additional shares rather than cash.