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Select Whether Each of the Following Would Be Added to or Deducted

Question 121

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Select whether each of the following would be added to or deducted from net income in determining net cash flow from operating activities by the indirect method:

Premises:
Increase in notes receivable due in 60 days
Decrease in accounts receivable
Amortization of patents
Increase in salaries payable
Gain on sale of fixed assets
Decrease in merchandise inventory
Increase in prepaid expenses
Increase in income taxes payable
Increase in notes payable due in 30 days
Decrease in accounts payable
Amortization of discount on bonds payable
Loss on retirement of long-term debt
Depreciation of fixed assets
Responses:
added
deducted

Correct Answer:

Increase in notes receivable due in 60 days
Decrease in accounts receivable
Amortization of patents
Increase in salaries payable
Gain on sale of fixed assets
Decrease in merchandise inventory
Increase in prepaid expenses
Increase in income taxes payable
Increase in notes payable due in 30 days
Decrease in accounts payable
Amortization of discount on bonds payable
Loss on retirement of long-term debt
Depreciation of fixed assets
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