When the direct method is used to determine the cash flows from operating activities,which of the following adjustments must be made to income tax expense to determine total income tax payments?
A)Add all changes in income taxes and income taxes payable.
B)Add decreases in income taxes payable and subtract increases in income taxes payable.
C)Add increases in income taxes payable and subtract decreases in income taxes payable.
D)Subtract all changes in income taxes payable.

Question

Quizplus · Accepted Answer

Income Tax Expense is directly converted to cash paid for income tax by adding decreases in Income Tax Payable or subtracting increases in Income Tax Payable.

When the Direct Method Is Used to Determine the Cash