Which of the following is added to net income to compute net cash from operating activities using the indirect method?
A) A loss on sale of equipment
B) A gain on sale of a long-term investment
C) An increase in accounts receivable
D) An increase in goodwill

Question

Quizplus · Accepted Answer

A loss on sale of equipment is added back to net income in the indirect method because it is a non-cash expense that reduced net income but did not affect cash flows.

Which of the Following Is Added to Net Income to Compute