Which of the following is added to net income as an adjustment under the indirect method of preparing the statement of cash flows?
A) Salaries payable decrease.
B) Gain on the sale of land.
C) Loss on the sale of equipment.
D) Accounts receivable increase.

Question

Quizplus · Accepted Answer

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

Which of the Following Is Added to Net Income as an Adjustment