Under the indirect method,a gain from the early extinguishment of long-term debt is subtracted from net income.

Question

Quizplus · Accepted Answer

According to the indirect method of preparing the cash flow statement, gains from the early extinguishment of long-term debt are deducted from net income. This is because such gains represent a non-cash item that did not result in an outflow of cash and therefore should not be included in the cash flow from operating activities.

Under the Indirect Method,a Gain from the Early Extinguishment of Long-Term