Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?
A) a gain on the sale of land
B) a decrease in accounts payable
C) an increase in accrued expenses
D) dividends paid on common stock

Question

Quizplus · Accepted Answer

An increase in accrued expenses represents expenses that have been incurred but not yet paid, which increases cash flow, so it should be added back to net income in the indirect method.

Which of the Following Should Be Added to Net Income