Amortization of the premium on bonds payable is subtracted from net income in the reconciliation of net income to cash flows from operations because
A) interest expense understates the cash paid for interest by the amount of the premium amortization.
B) it reduces income without causing a cash outflow.
C) it increases income without causing a cash flow.
D) it is a financing cash outflow.

Question

Quizplus · Accepted Answer

The Answer of Amortization of the premium on bonds payable is subtracted from net income in the reconciliation of net income to cash flows from operations because
A) interest expense understates the cash paid for interest by the amount of the premium amortization.
B) it reduces income without causing a cash outflow.
C) it increases income without causing a cash flow.
D) it is a financing cash outflow.

Amortization of the Premium on Bonds Payable Is Subtracted from Net