In preparing cash flows provided by operating activities using the indirect method, which of the following items is added to net income?
A)Cash received from the sale of property, plant and equipment
B)Losses on investing and financing transactions
C)Increases in current asset balances
D)Decreases in current liability balances

Question

Quizplus · Accepted Answer

Losses on investing and financing transactions are added back to net income when preparing cash flows from operating activities using the indirect method. This is because these losses are non-cash expenses that reduce net income but do not affect cash flow.

In Preparing Cash Flows Provided by Operating Activities Using the Indirect