Indicate whether each of the following would be added to or deducted from net income in determining net cash flow from operating activities by the indirect method:
a. Increase in notes payable due in 90 days to vendors
b. Decrease in prepaid expenses
c. Increase in merchandise inventory
d. Loss on disposal of fixed assets
e. Decrease in accounts receivable
f. Decrease in salaries payable
g. Gain on retirement of long-term debt
h. Increase in notes receivable due in 90 days from customers
i. Depreciation of fixed assets
j. Amortization of patent
k. Decrease in accounts payable
Answer:
a. added
b. added
c. deducted
d. added
e. added
f. deducted
g. deducted
h. deducted
i. added
j. added
k. deducted