Which of the following items would be deducted from net income to determine the net cash provided by operating activities using the indirect method?
A) gain on sale of noncurrent assets and amortization of discount on investment in bonds.
B) amortization of bonds payable premium and amortization of intangibles.
C) loss on sale of noncurrent assets and amortization of discount on investment in bonds.
D) gain on sale of noncurrent assets and amortization of premium on investment in bonds.

Question

Quizplus · Accepted Answer

Gains on the sale of noncurrent assets are added back to net income when using the indirect method because these gains are considered non-operating activities and must be reversed out to calculate cash flow from operating activities. Amortization of discount on investment in bonds is a non-cash expense that is added back to net income in the indirect method.

Which of the Following Items Would Be Deducted from Net