Which of the following items are included in the adjustments to net income to obtain cash flow from operating activities?
A) Payment of dividends and depreciation expense.
B) The change in accounts receivable and the acquisition of land.
C) The gain from an asset sale and the payment of dividends.
D) The change in inventory and depreciation expense.

Question

Quizplus · Accepted Answer

Only the change in inventory and depreciation expense are included in the adjustments to net income to obtain cash flow from operating activities. Payment of dividends and gain from an asset sale would be classified as cash flow from financing activities, while the acquisition of land would be classified as cash flow from investing activities. The change in accounts receivable would also be included in the adjustments, but it is not one of the options given.

Which of the Following Items Are Included in the Adjustments