Brief Exercise 12-6 Indirect Method For each of the following items, indicate wh

Question

Brief Exercise 12-6 Indirect Method

For each of the following items, indicate whether it would be added to (A) or deducted from

(D) net income to arrive at net cash flow provided by operating activities under the indirect

method.

_______ 1. Increase in accounts receivable

_______ 2. Decrease in prepaid rent

_______ 3. Decrease in inventory

_______ 4. Decrease in accounts payable

_______ 5. Increase in income taxes payable

_______ 6. Depreciation expense

_______ 7. Gain on sale of equipment

_______ 8. Loss on early retirement of bonds

Explanation / Answer

1D

2D

3A

4D

5A

6A

7D

8A

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