When Using the Indirect Method of Preparing a Statement of Cash

question 47

Multiple Choice

When using the indirect method of preparing a statement of cash flows, which of the following items would need to be deducted from net income in order to reconcile to cash provided by operating activities?

• A) Gain on sale of property, plant, and equipment
• B) Decrease in prepaid insurance
• C) Depreciation expense
• D) Increase in salaries payable

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