Question

The amortization of bond premium on long-term debt should be presented in a statement of cash flows (using the indirect method for operating activities) as a(n)

Answer 1

Answer:

Operating Activity

Explanation:

The Indirect method, reconciles the Operating Profit to the Operating Cash Flow by adjusting the following items (1) Non Cash flow items previously added or deducted from Operating Profit and (2) Changes in Working Capital items.

Amortization of bond premium is an item of non-cash flow that was previously deducted from Operating Profit and needs to be added back.