The amortization of patents should be presented in a statement of cash flows prepared using the indirect method as a(n)
A) inflow and outflow of cash.
B) outflow of cash.
C) addition to net income in the adjustments to reconcile net income to cash from operating activities.
D) deduction from net income in the adjustments to reconcile net income to cash from operating activities.

Question

Quizplus · Accepted Answer

Amortization of patents is a non-cash expense. In the statement of cash flows prepared using the indirect method, non-cash expenses are added back to net income in the adjustments section to reconcile net income to net cash provided by operating activities.

The Amortization of Patents Should Be Presented in a Statement