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Which of the following should be added to net income in calculating net cash flow from operating activities using the indirect method?

A. Depreciation expense
B. Increase in accounts receivable
C. Decrease in accounts payable
D. Loss on sale of equipment

Sagot :

GinnyAnsweridn

Final answer:

Depreciation should be added back to net income in calculating net cash flow from operating activities using the indirect method.


Explanation:

Depreciation should be added to net income in calculating net cash flow from operating activities using the indirect method. When using the indirect method, activities that would decrease net assets, such as depreciation, are added back to arrive at net cash flows from operations.


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