Asked by Patel Fenil on Jun 30, 2024
Verified
Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method?
A) depreciation expense
B) gain on sale of land
C) a loss on the sale of equipment
D) dividends declared and paid
Gain
A financial benefit that is realized when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes needed to sustain the activity.
Indirect Method
A method used in cash flow statements to adjust net income for the changes in non-cash accounts to calculate the cash from operating activities.
Depreciation Expense
Depreciation Expense is an accounting method used to allocate the cost of a tangible asset over its useful life, representing how much of an asset's value has been used up over a specific period.
- Become familiar with the adjustments made to net income for calculating net cash flow from operating activities.
Verified Answer
Learning Objectives
- Become familiar with the adjustments made to net income for calculating net cash flow from operating activities.
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