When preparing a the operating section of the statement of cash flows using the indirect method,which of the following items are subtracted from net income?
A)depreciation expense
B)gain on sale of long-term assets
C)decrease in prepaid expenses
D)increase in income taxes payable

Question

Quizplus · Accepted Answer

Gains on the sale of long-term assets are subtracted from net income because they are non-operating items that increase net income but do not affect cash flow from operating activities.

When Preparing a the Operating Section of the Statement of Cash