Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method?
A) depreciation expense
B) gain on sale of land
C) a loss on the sale of equipment
D) dividends declared and paid

Question

Quizplus · Accepted Answer

In the indirect method of calculating net cash flow from operating activities, non-cash expenses like depreciation are added back to net income, and gains on the sale of assets are deducted because they are considered investing activities, not operating activities. Losses on the sale of assets are added back, and dividends declared and paid are considered financing activities, not adjustments in the operating activities section.

Which of the Following Should Be Deducted from Net Income