When using the indirect method to calculate and report net cash provided or used by operating activities,which of the following is subtracted from net income?
A)Decrease in income taxes 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 income taxes payable indicates that cash was used to pay off some of the tax liability, which 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