Of the following, which has a positive effect on the computation of cash flow from operations using the indirect method?
A) Decrease in Accounts Payable
B) Increase in Inventory
C) Decrease in Notes Payable
D) Depreciation Expense

Question

Quizplus · Accepted Answer

Depreciation expense is added back to net income in the computation of cash flow from operations using the indirect method because it is a non-cash expense that reduces net income but does not affect cash flow.

Of the Following, Which Has a Positive Effect on the Computation