Amortization of patents can be added to income in the operations section of the statement of cash flows because:
A)it is not a tax deductible expense.
B)it results in an increase in income.
C)it does not require the outlay of cash.
D)patent amortization is not an expense.
E)it represents an inflow of cash.

Question

Quizplus · Accepted Answer

Patents are considered intangible assets and their amortization is a non-cash expense. Therefore, it does not require the outlay of cash and can be added back to net income in the operations section of the statement of cash flows.

Amortization of Patents Can Be Added to Income in the Operations