An Increase in the Accumulated Depreciation Account of $50,000 Over

question 68

Multiple Choice

An increase in the accumulated depreciation account of $50,000 over the course of a year would be shown on the company's statement of cash flows prepared under the indirect method as:

• A) an addition to net income of $50,000 in order to arrive at net cash provided by operating activities.
• B) a deduction from net income of $50,000 in order to arrive at net cash provided by operating activities.
• C) an addition of $50,000 under investing activities.
• D) a deduction of $50,000 under investing activities.

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Definitions:

Economic Profits

The variance between total income and the aggregate of explicit and implicit costs for a business.

General Equilibrium

A state in an economy where all markets are in equilibrium simultaneously, and the decisions of consumers and producers are perfectly coordinated.

Pareto Efficiency

An economic state where resources are allocated in a way that it is impossible to make one individual better off without making another individual worse off.

Simultaneous Equilibrium

A situation in which multiple markets or economic variables reach equilibrium at the same time, with interdependencies considered.