Under the indirect method,losses would be added to net income when determining the net cash flow from operating activities.

Question

Quizplus · Accepted Answer

The indirect method starts with net income and makes adjustments for non-cash items and changes in working capital to arrive at net cash flow from operating activities. Losses that are deducted in the calculation of net income, such as from the sale of assets, are added back to arrive at the operating cash flow.

Under the Indirect Method,losses Would Be Added to Net Income