Which of the following would be added to net income when determining cash flows from operating activities under the indirect method?
A)A decrease in accounts payable.
B)Patent amortization expense.
C)An increase in prepaid insurance.
D)A gain on the sale of a depreciable asset.

Question

Quizplus · Accepted Answer

Patent amortization expense is added back to net income in the cash flow from operating activities under the indirect method because it is a non-cash expense that reduced net income but did not involve an outlay of cash.

Which of the Following Would Be Added to Net Income