Which of the following would not be an adjustment to net income using the indirect method?
A)Depreciation expense
B)An increase in prepaid expenses
C)Amortization expense
D)An increase in land

Question

Quizplus · Accepted Answer

An increase in land is not an expense item and therefore would not be included in the adjustments made to net income using the indirect method. Depreciation expense and amortization expense are both non-cash expenses that would be added back to net income, while an increase in prepaid expenses would be subtracted from net income.

Which of the Following Would Not Be an Adjustment to Net