Cash Flows from Operating Activities—Indirect Method 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 merchandise inventory   b.  Increase in prepaid expenses   c.  Depreciation of fixed assets   d.  Gain on disposal of fixed assets   e.  Amortization of patent   f.  Increase in notes payable due in 120 days to vendors   g.  Increase in accounts payable   h.  Decrease in wages payable   i.  Decrease in notes receivable due in 60 days from customers   j.  Decrease in accounts receivable   k.  Loss on retirement of long-term debt

Question

Cash Flows from Operating Activities—Indirect Method

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 merchandise inventory  
b.  Increase in prepaid expenses  
c.  Depreciation of fixed assets  
d.  Gain on disposal of fixed assets  
e.  Amortization of patent  
f.  Increase in notes payable due in 120 days to vendors  
g.  Increase in accounts payable  
h.  Decrease in wages payable  
i.  Decrease in notes receivable due in 60 days from customers  
j.  Decrease in accounts receivable  
k.  Loss on retirement of long-term debt  

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