When using the indirect method, why is a gain subtracted from net income and a loss added

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When using the indirect method, why is a gain subtracted from net income and a loss added to net income when computing cash flow from operations?

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Intermediate Accounting

ISBN: 978-0324592375

17th Edition

Authors: James D. Stice, Earl K. Stice, Fred Skousen

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Question Posted: Jan 29, 2012 12:35 AM

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When using the indirect method, why is a gain subtracted from net income and a loss added

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Because the indirect method begins with the net inc...View the full answer

Intermediate Accounting

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