Which of the following would be subtracted from net income when determining cash flows from operating activities under the indirect method?
A)A decrease in utilities payable.
B)Patent amortization expense.
C)A decrease in prepaid rent.
D)A loss on the sale of a depreciable asset.

Question

Quizplus · Accepted Answer

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

Which of the Following Would Be Subtracted from Net Income