Question Details

Which of the following adjustments to convert net income to net cash 




1.	Which of the following adjustments to convert net income to net cash provided by operating activities is correct?
		Add to Net Income	Deduct from Net Income
a.	Accounts Receivable	increase	decrease
b.	Prepaid Expenses	increase	decrease
c.	Inventory	decrease	increase
d.	Taxes Payable	decrease	increase

2.	Which of the following adjustments to convert net income to net cash provided by operating activities is incorrect?
		Add to Net Income	Deduct from Net Income
a.	Accounts Receivable	decrease	increase
b.	Prepaid Expenses	increase	decrease
c.	Inventory	decrease	increase
d.	Accounts Payable	increase	decrease

	3.	Which of the following adjustments to convert net income to net cash provided by operating activities is not added to net income?
a.	Gain on Sale of Equipment
b.	Depreciation Expense
c.	Patent Amortization Expense
d.	Depletion Expense

	4.	Using the indirect method, if equipment is sold at a gain, the
a.	sale proceeds received are deducted in the operating activities section.
b.	sale proceeds received are added in the operating activities section.
c.	amount of the gain is added in the operating activities section.
d.	amount of the gain is deducted in the operating activities section.

	5.	A company had net income of ¥2,100,000. Depreciation expense is ¥260,000. During the year, Accounts Receivable and Inventory increased ¥150,000 and ¥400,000, respectively. Prepaid Expenses and Accounts Payable decreased ¥20,000 and ¥40,000, respectively. There was also a loss on the sale of equipment of ¥30,000. How much cash was provided by operating activities?
a.	¥1,760,000
b.	¥1,820,000
c.	¥2,560,000
d.	¥2,680,000





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