The extent to which a firm adjusts net income for changes in noncurrent assets and noncurrent liabilities in deriving cash flow from operations depends on the nature of its operations._____ will usually show additions or subtractions for losses and gains on the disposal of assets.
A)Firms that have decreased earnings
B)Firms that increase in size
C)Firms that decrease in size
D)Firms that have increased earnings
E)Service firms

Question

Quizplus · Accepted Answer

Firms that decrease in size often dispose of assets, leading to gains or losses that need to be adjusted in the cash flow statement.

The Extent to Which a Firm Adjusts Net Income for Changes