Using the indirect method to calculate net cash provided (or used)by operating activities,which of the following is subtracted from profit?
A)Depreciation expense
B)Amortization of intangible assets
C)Decrease in income taxes payable
D)Bad debts expense
E)None of these

Question

Quizplus · Accepted Answer

In the indirect method for calculating net cash provided by operating activities, non-cash expenses such as depreciation and amortization are added back to profit. However, a decrease in income taxes payable indicates that less cash was paid for taxes than the expense recognized, thus it is subtracted from profit to adjust for the cash reality.

Using the Indirect Method to Calculate Net Cash Provided (Or