When using the indirect method to prepare the operating section of a statement of cash flows, which of the following is added to net income to compute cash flows from operating activities?
A) gain on sale of long-term asset
B) decrease in deferred tax liability
C) bond discount amortization
D) All of the above

Question

Quizplus · Accepted Answer

Bond discount amortization is added back to net income because it is a non-cash expense that reduces net income but does not affect cash flow.

When Using the Indirect Method to Prepare the Operating Section