If a Company Uses the Indirect Method to Prepare the Statement

question 116

Multiple Choice

If a company uses the indirect method to prepare the statement of cash flows, which of the following items would be subtracted from net income in determining the net cash flow from operating activities?

• A)A loss on the sale of equipment would be subtracted from net income.
• B)An increase in dividends payable would be subtracted from net income.
• C)Amortization of a premium on bonds payable would be subtracted from net income.
• D)Depreciation expense would be subtracted from net income.

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