Using the indirect method, which of the following would be subtracted from net income?
A) depreciation expense
B) increase in accounts receivable
C) increase in accounts payable
D) decrease in prepaid expenses

Question

Quizplus · Accepted Answer

An increase in accounts receivable is subtracted from net income because it represents revenue that has been recognized but not yet collected in cash, thus reducing cash flow.

Using the Indirect Method, Which of the Following Would Be