In preparing the cash flows from operating activities section of the statement of cash flows by the indirect method, the amortization of bond discount for the period is deducted from the net income for the period.

Question

Quizplus · Accepted Answer

Amortization of bond discount is added to net income in the indirect method because it is a non-cash expense that reduces net income but does not affect cash flow.

In Preparing the Cash Flows from Operating Activities Section of the Statement