On the statement of cash flows using the indirect method,an increase in the deferred tax liability would be shown as

Question

Quizplus · Accepted Answer

An increase in deferred tax liability is added back to net income in the operating activities section of the cash flow statement when using the indirect method. This is because the increase in deferred tax liability represents taxes deferred to future periods, thus not affecting current cash flows.

On the Statement of Cash Flows Using the Indirect Method,an