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

question 67

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 increase.
• B)Gain on the sale of land.
• C)Inventory increase.

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Definitions:

Differential Cost

The difference in total cost that will result from selecting one alternative over another in a decision-making situation.

Differential Cost

The difference in total cost that will result from selecting one choice over another.

Additional Cost

Expenses incurred that are above and beyond the initial forecast or budget for a project or product.

Differential Revenue

The difference in revenue generated under two different scenarios or as a result of a specific action.