Given the items below, which of the following is a subtraction from net income to arrive at Operating Cash Flows using the indirect method? I. Loss on sale of assets
II. Increase in Supplies
III. Increase in Accounts Payable
IV. Depreciation expense

Question

Quizplus · Accepted Answer

An increase in supplies represents an outflow of cash, as more cash is tied up in inventory, thus it is subtracted from net income to calculate operating cash flows using the indirect method.

Given the Items Below, Which of the Following Is a Subtraction