When using the indirect method to calculate and report net cash provided or used by operating activities, which of the following is subtracted from income?
A) Decrease in wages payable.
B) Depreciation expense.
C) Amortization of intangible assets.
D) Bad debts expense.
E) Decrease in merchandise inventory.

Question

Quizplus · Accepted Answer

A decrease in wages payable indicates that cash was used to pay off the liability, thus it is subtracted from net income in the indirect method to calculate cash flows from operating activities.

When Using the Indirect Method to Calculate and Report Net