When using the indirect method to calculate and report net cash provided or used by operating activities, which of the following is subtracted from net income?
A) Decrease in income taxes payable.
B) Depreciation expense.
C) Bad debts expense.
D) Amortization of intangible assets.
E) Decrease in merchandise inventory.

Question

Quizplus · Accepted Answer

A decrease in income taxes payable indicates that cash was used to pay off tax liabilities, so it is subtracted from net income in the indirect method.

When Using the Indirect Method to Calculate and Report Net