Which of the following items is not included in the calculation of cash flows provided by operating activities using the indirect method?
A)An increase in accounts receivable
B)An increase in salaries payable
C)Receipt of cash dividends
D)Repayment of a 2-year note payable

Question

Quizplus · Accepted Answer

The indirect method for calculating cash flows from operating activities starts with net income and adjusts for changes in non-cash accounts on the balance sheet, such as accounts receivable, and non-operating gains and losses. Repayment of a 2-year note payable is a financing activity, not an operating activity.

Which of the Following Items Is Not Included in the Calculation