For a firm using the indirect method,amortization of bond discount should be added back to net income to arrive at cash flow from operating activities.

Question

Quizplus · Accepted Answer

Amortization of bond discount is a non-cash expense and reduces net income. Therefore, it should be added back to net income in the operating activities section of the cash flow statement prepared using the indirect method.

For a Firm Using the Indirect Method,amortization of Bond Discount