When preparing a the operating section of the statement of cash flows using the indirect method,which of the following items are added to net income?
A)decrease in accrued expenses
B)gain on sale of long-term assets
C)bad debt expense
D)increase in accounts receivable

Question

Quizplus · Accepted Answer

Bad debt expense is added back to net income in the indirect method because it is a non-cash expense that reduces net income but does not affect cash flow.

When Preparing a the Operating Section of the Statement of Cash