Which of the following would be subtracted from net income when using the indirect method to derive net cash flows from operating activities?
A) Decrease in net accounts receivable
B) Loss on sale of investments
C) Decrease in salaries and wages payable
D) Depreciation expense

Question

Quizplus · Accepted Answer

When using the indirect method to derive net cash flows from operating activities, a decrease in salaries and wages payable would be subtracted from net income. This is because it indicates that less cash was paid out for salaries and wages than the expense recognized in the income statement, reducing the cash flow from operations.

Which of the Following Would Be Subtracted from Net Income