How do we treat the income tax paid in the cash flow statement?
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How do we treat the income tax paid in the cash flow statement?
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Income tax paid is classified as a cash outflow from operating activities in the cash flow statementThis is because income taxes are a direct consequence of a companys operating activitiesand the payment of taxes represents a cash outflow that reduces the companys net cash from operating activities Income tax paid is typically presented as a separate line item in the cash flow statementfollowing the calculation of net income from operating activitiesThis allows users to see clearly the amount of cash that the company has paid in taxes during the period Here is an example of how income tax paid is presented in the cash flow statement ...View the full answer
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