Using the indirect method,which of the following would not be added to net income?
A)An increase in Equipment.
B)A decrease in Prepaid Insurance.
C)An increase in Salaries and Wages Payable.
D)A decrease in Supplies.

Question

Quizplus · Accepted Answer

Decreases in current assets (Prepaid Insurance and Supplies)and increases in current liabilities (Salaries and Wages Payable)are added to convert net income to cash flows from operating activities.An increase in the Equipment account would be reflected in the investing activities section.

Using the Indirect Method,which of the Following Would Not Be