The amortization of bond discount related to long-term debt should be presented in a statement of cash flows prepared using the indirect method as a(n)
A)inflow and outflow of cash.
B)outflow of cash.
C)deduction from net income in the adjustments to reconcile net income to cash from operating activities.
D)addition to net income in the adjustments to reconcile net income to cash from operating activities.
E)None of these is correct.

Question

Quizplus · Accepted Answer

Amortization of bond discount is a non-cash expense that reduces net income, so it is added back to net income in the operating activities section of the cash flow statement when using the indirect method.

The Amortization of Bond Discount Related to Long-Term Debt Should