Which of the following items is subtracted from net income when using the indirect method of calculating cash flows provided by operating activities?
A)Depreciation expense
B)Repayment of bonds payable
C)A gain on the sale of land
D)A loss on the sale of equipment

Question

Quizplus · Accepted Answer

A gain on the sale of land is subtracted from net income in the indirect method because it is a non-cash item that increased net income but did not affect cash flows from operating activities.

Which of the Following Items Is Subtracted from Net Income