Which of the following would be added to profit using the indirect method?
A) an increase in accounts receivable
B) an increase in prepaid expenses
C) depreciation expense
D) a decrease in accounts payable

Question

Quizplus · Accepted Answer

Depreciation expense is added back to profit when using the indirect method because it is a non-cash expense that reduces net income but does not affect cash flow.

Which of the Following Would Be Added to Profit Using