Which of the following items would be deducted from net income to determine net cash provided by operating activities using the indirect method?
A)loss on sale of plant assets and amortization of bond payable discount
B)amortization of bond payable premium and gain on sale of equipment
C)amortization expense and gain on sale of equipment
D)decrease in income taxes payable and amortization of goodwill

Question

Quizplus · Accepted Answer

B) Amortization of bond payable premium and gain on sale of equipment are correct because the amortization of bond payable premium is added back to net income since it is a non-cash expense, and the gain on sale of equipment is deducted from net income as it does not represent a cash inflow from operating activities.

Which of the Following Items Would Be Deducted from Net