When preparing a statement of cash flows (indirect method), which of the following is NOT an adjustment to reconcile net income to cash flows from operating activities?
A) an increase in prepaid expenses
B) an increase in bonds payable
C) a decrease in income taxes payable
D) depreciation expense

Question

Quizplus · Accepted Answer

An increase in bonds payable is a financing activity and not an adjustment for reconciling net income to cash flows from operating activities. The other choices (A, C, and D) are all adjustments that may need to be made when reconciling net income to cash flows from operating activities.

When Preparing a Statement of Cash Flows (Indirect Method), Which