Assume that a company uses the indirect method to prepare the operating activities section of the statement

Question:

Assume that a company uses the indirect method to prepare the operating activities section of the statement of cash flows.

Required

For each of the following items, till in the blank to indicate whether it would be added (A) to net income, deducted (D) from net income, or not reported (NR) in the operating activities section of the statement of cash flows prepared using the indirect method

a. Purchase of a new computer system ______.

b. Decrease in accounts payable ______.

c. Increase in prepaid insurance ______.

d. Depreciation expense ______.

e. Increase in inventory ______.

f. Amortization of patents ______.

g. Loss on retirement of bonds ______.

h. Cain on the sale of used delivery truck ______.

i. Bad debt expense ______.

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...