Which of the following is reported as a deduction from net income when using the indirect method to determine net cash flows from operating activities?
A)Depreciation expense.
B)A bad debt written off under the allowance method.
C)Amortization of premium on bonds payable.
D)Dividends declared.

Question

Quizplus · Accepted Answer

Amortization of premium on bonds payable is deducted from net income because it represents a non-cash item that increases net income, thus it needs to be subtracted to arrive at the cash flow from operating activities.

Which of the Following Is Reported as a Deduction from Net