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Choose the Appropriate Letter to Match the Account Balance Change

Question 221

Matching

Choose the appropriate letter to match the account balance change with the type of adjustment made to net income when using the indirect method to determine net cash flow provided by operating activities.

Premises:
Increase in Dividends Payable
Decrease in Accrued Liabilities
Decrease in Property,Plant,and Equipment
Increase in Accounts Receivable
Gain on Sales of Property,Plant and Equipment
Decrease in Income Tax Payable
Decrease in Inventory
Decrease in Prepaid Expenses
Depreciation Expense
Increase in Accounts Payable
Responses:
Subtract item from net income
No adjustment necessary
Add item to net income

Correct Answer:

Increase in Dividends Payable
Decrease in Accrued Liabilities
Decrease in Property,Plant,and Equipment
Increase in Accounts Receivable
Gain on Sales of Property,Plant and Equipment
Decrease in Income Tax Payable
Decrease in Inventory
Decrease in Prepaid Expenses
Depreciation Expense
Increase in Accounts Payable
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