Which would be subtracted from net income in the operating section of an indirect cash flow statement?

Question

Quizplus · Accepted Answer

An increase in inventory would be subtracted from net income in the operating section of an indirect cash flow statement, as it indicates that more cash was used in purchasing inventory and less cash is available for other operating activities. A decrease in prepaid insurance would be added back, as it represents cash that was paid in advance and is now being utilized. A decrease in bonds payable and an increase in interest payable would not affect the operating section, but rather the financing section of the cash flow statement.

Which Would Be Subtracted from Net Income in the Operating