Under the indirect method,which of the following is not an item that is added back to net income in determining net cash flow from operating activities?
A) Decrease in accounts receivable
B) Decrease in inventory
C) Depreciation expense
D) Gain on sale of store fixtures

Question

Quizplus · Accepted Answer

Under the indirect method, gains on the sale of store fixtures would be subtracted from net income as they are classified as investing activities, not operating activities. The other items listed (decrease in accounts receivable, decrease in inventory, depreciation expense) would be added back to net income to determine net cash flow from operating activities.

Under the Indirect Method,which of the Following Is Not an Item