The Extent to Which a Firm Adjusts Net Income for Changes

Multiple Choice

The extent to which a firm adjusts net income for changes in noncurrent assets and noncurrent liabilities in deriving cash flow from operations under the indirect method depends on the nature of its operations.Firms that decrease in size will usually show

A) additions or subtractions for losses and gains on the disposal of assets.
B) additions, only for gains on the disposal of assets.
C) subtractions, only for losses on the disposal of assets.
D) no adjustment for losses and gains on the disposal of assets.
E) none of the above