Amortization of the premium on bonds payable is subtracted from net income in the reconciliation of net income to cash flows from operations because
a. it is a financing cash outflow.
b. it reduces income without causing a cash outflow.
c. interest expense understates the cash paid for interest by the amount of the premium amortization.
d. it increases income without causing a cash flow.
e. None of these answers is correct.
C
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