Which of the following is a deduction from net income when using the indirect approach to prepare the cash from operating activities of the Statement of Cash Flows?
A)increase in accounts payable
B)increase in prepaid expenses
C)loss on sale of investments
D)depreciation expense

Question

Quizplus · Accepted Answer

An increase in prepaid expenses is deducted from net income in the indirect method because it represents a cash outflow that does not affect net income.

Which of the Following Is a Deduction from Net Income