Amortization of patents can be added to income in the operations section of the statement of cash flows because:
A) it is not a tax deductible expense
B) it results in a cash inflow
C) it does not require the outlay of cash
D) patent amortization is not an expense
E) it represents an inflow of cash

Question

Quizplus · Accepted Answer

Amortization of patents is a non-cash expense, meaning it reduces net income but does not involve an actual cash outflow, so it is added back to net income in the operating section of the cash flow statement.

Amortization of Patents Can Be Added to Income in the Operations