If the Indirect Method Is Used,which of the Following Would

question 28

Multiple Choice

If the indirect method is used,which of the following would be subtracted from net income to arrive at net cash flows from operating activities?

• A)Increase in Notes Payable.
• B)Decrease in Inventory.
• C)Decrease in Accounts Payable.
• D)Depreciation Expense.

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Definitions:

Tax Bracket

A range of incomes taxed at a particular rate under a progressive tax system.

Capital Asset

An asset held by an individual or business for investment or personal purposes, excluding inventory or assets sold in the ordinary course of a business.

Rental Property

A property owned by an individual or entity that is rented out to tenants in exchange for monthly rent payments.

Section 1245

A provision in the U.S. tax code that treats the gain from the sale of certain types of property (primarily depreciable personal property) as ordinary income rather than capital gain.