Which of the Following Is an Addition to Net Income

question 128

Multiple Choice

Which of the following is an addition to net income when the indirect method is used?

• A) an increase in inventory
• B) a loss on sale of equipment
• C) a decrease in accounts payable
• D) an increase in accounts receivable

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Definitions:

Maximize Stock Price

It refers to strategies and measures taken by a company aimed at increasing the market value of its shares.

Target Firm's Shareholders

Individuals or entities that own shares in a company that is the subject of a merger or acquisition.

Purchase Method

An accounting method for business combinations where the acquiring company records the assets and liabilities of the acquired company at their fair market values.

Pooling Method

An accounting technique used in mergers and acquisitions where the assets and liabilities of the merging companies are combined using their book values, rather than being re-valued or adjusted.