Which of the following would be added to net income using the indirect method?
A)Loss on sale of equipment.
B)Gain on sale of a long-term investment.
C)An increase in accounts receivable.
D)Proceeds from the sale of a patent.

Question

Quizplus · Accepted Answer

A loss on the sale of equipment is added back to net income in the indirect method because it is a non-cash expense that reduced net income but did not affect cash flow.

Which of the Following Would Be Added to Net Income