When Using the Indirect Method to Prepare the Operating Section

question 136

Multiple Choice

When using the indirect method to prepare the operating section of a statement of cash flows, which of the following is deducted from net income to compute cash provided by/used by operating activities?

• A) Decrease in accounts receivable.
• B) Gain on sale of land.
• C) Amortization of patent.
• D) All of the above are deducted from net income to arrive at cash flow from operating activities.

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