Which one of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?
A) A gain on the sale of land
B) A decrease in accounts payable
C) An increase in accrued liabilities
D) Dividends paid on common stock

Question

Quizplus · Accepted Answer

An increase in accrued liabilities is added back to net income in the indirect method of calculating cash flow from operating activities because it represents expenses that have been incurred but not yet paid in cash, thus not affecting the actual cash flow yet.

Which One of the Following Should Be Added to Net