Which of the Following Is NOT Added to Net Income

question 57

Multiple Choice

Which of the following is NOT added to net income as an adjustment to reconcile net income to cash from operating activities on the statement of cash flows?

• A) Increase in an accrued liability
• B) Amortization of discount on bond payable
• C) Loss on sale of operational asset
• D) Increase in deferred tax asset

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Definitions:

Year-end Adjustment

Financial adjustments made at the end of the accounting year to reflect accurate and up-to-date information in financial statements.

Stock Investment

The act of purchasing equity shares in a company with the expectation of earning dividends or selling the shares at a higher price for profit.

Insignificant Influence

Refers to a situation where an investor does not have the power to govern the financial and operating policies of an investee, leading to no significant impact on the financial outcomes of the investee.

Net Income

Profit after all expenses, taxes, and deductions are subtracted from total revenue.