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

Question

Quizplus · Accepted Answer

A decrease in income taxes payable indicates that cash was used to pay off the liability, thus it is subtracted from net income in the indirect method.

Using the Indirect Method to Calculate Net Cash Provided or Used)