Which of the following would not be added to net income in calculating cash flows from operating activities on a statement of cash flows prepared using the indirect method?
A)Amortization expense.
B)A decrease in accounts receivable.
C)An increase in wages payable.
D)A gain on the sale of equipment.

Question

Quizplus · Accepted Answer

A gain on the sale of equipment is a non-cash transaction and would be subtracted from net income in calculating cash flows from operating activities using the indirect method. Amortization expense would be added back, a decrease in accounts receivable would be added back, and an increase in wages payable would be subtracted.

Which of the Following Would Not Be Added to Net