Amortization of the premium on bonds payable is subtracted from net income in the reconciliation of net income to cash flows from operations because
A)it is a financing cash outflow.
B)it reduces income without causing a cash outflow.
C)interest expense understates the cash paid for interest by the amount of the premium amortization.
D)it increases income without causing a cash flow.
E)None of these answers is correct.

Question

Quizplus · Accepted Answer

Interest expense understates the cash paid for interest by the amount of the premium amortization.

Amortization of the Premium on Bonds Payable Is Subtracted from Net