Which of the following is NOT added to net income as an adjustment to reconcile net income to cash from operating activities on the statement of cash flows?
A) Increase in an accrued liability
B) Amortization of discount on bond payable
C) Loss on sale of operational asset
D) Increase in deferred tax asset

Question

Quizplus · Accepted Answer

Increases in deferred tax assets are not added back to net income in the reconciliation to cash from operating activities because they represent a future tax benefit, not a current cash flow. Adjustments like increases in accrued liabilities, amortization of discounts on bonds payable, and losses on sale of operational assets are added back because they are non-cash expenses that reduce net income but do not affect cash flow.

Which of the Following Is NOT Added to Net Income