Which of the Following Is Subtracted from Net Income as an Adjustment

question 82

Multiple Choice

Which of the following is subtracted from net income as an adjustment under the indirect method of preparing the statement of cash flows?

• A)Gain on the sale of land.
• B)Accounts receivable decrease.
• C)Inventory decrease.

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Definitions:

Property, Plant, And Equipment

Tangible long-lived assets used in the operations of a business, such as machinery, buildings, and vehicles.

Operating Cash Flows

Refers to the cash generated from a company's core business operations, excluding financing and investing activities.

Financial Analysis Tools

Instruments and techniques used to evaluate a company's financial statements to make decisions about investments and other financial matters.

Common Size Statements

Financial statements that display all line items as a percentage of a common base figure, facilitating comparison across time and with other companies.