In computing Net Cash Provided by Operating Activities using the indirect method,each of the following is added to net income EXCEPT:
A)an increase in accrued expenses payable.
B)a gain on sale of equipment.
C)depreciation expense.
D)a decrease in inventory.

Question

Quizplus · Accepted Answer

A gain on sale of equipment is subtracted from net income in the indirect method because it is a non-operating gain that is included in net income but does not affect cash from operating activities.

In Computing Net Cash Provided by Operating Activities Using the Indirect