Which of the following is not added to net income as an adjustment to reconcile net income to cash from operating activities on the statement of cash flows?
A)Increase in an accrued liability
B)Amortization of discount on bond payable
C)Loss on sale of operational asset
D)Increase in deferred tax asset
E)None of these answers is correct.

Question

Quizplus · Accepted Answer

An increase in deferred tax asset is not added back to net income in the reconciliation to cash from operating activities because it represents a future tax benefit, not a current cash inflow or expense saved. Adjustments typically involve adding back non-cash expenses (like amortization or losses on sales) and accounting for changes in working capital (like increases in accrued liabilities) that do not affect cash directly.

Which of the Following Is Not Added to Net Income