Under the indirect method, which of the following is not an item that is added back to net income in determining net cash flow from operating activities?
A)Decrease in Accounts Receivable
B)Decrease in inventory
C)Depreciation expense
D)Gain on sale of store fixtures

Question

Quizplus · Accepted Answer

Under the indirect method of calculating net cash flow from operating activities, items that are added back to net income include: decrease in accounts receivable, decrease in inventory, depreciation expense. However, gains on sale of store fixtures are not added back as they do not represent cash generated from operating activities but rather a gain on an investing activity.

Under the Indirect Method, Which of the Following Is Not