When computing the net cash provided by operating activities using the indirect approach on the statement of cash sows, which item below would NOT be added to net income? A. Depreciation. B. Loss on the sale of an asset. C. Decrease in accounts payable. D. Decrease in prepaid expenses.

Question

Colt Villarreal

Business

23 November, 08:14

When computing the net cash provided by operating activities using the indirect approach on the statement of cash sows, which item below would NOT be added to net income? A. Depreciation. B. Loss on the sale of an asset. C. Decrease in accounts payable. D. Decrease in prepaid expenses.

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Answers (1)

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Roxanne · Answer 1

C. Decrease in accounts payable

Explanation:

Operating activities: It includes certain transactions that after net income effect the working capital. It would subtract the rise in current assets and a reduction in current liabilities, while adding the decline in current assets and an increase in current liabilities.

It would manage those adjustments in working capital. In fact, the depreciation expense contributes to the net revenue And the loss on asset sales is added while the gain on asset sales is deducted

So, the items would not be added is C. Decrease in accounts payable