In the statement of cash flows, by using the indirect method for determining cash flows from operating activities, a decrease in deferred tax liabilities is:

Question

Quizplus · Accepted Answer

A decrease in deferred tax liabilities is subtracted from net income when using the indirect method for determining cash flows from operating activities because it implies that some income taxes were saved in the past (reducing taxes paid in the current period), thus needing an adjustment to reflect the actual cash flow effect.

In the Statement of Cash Flows, by Using the Indirect