If the indirect method is used,each of the following is a proper adjustment to net income to arrive at net cash flows from operating activities except
A) adding a decrease in Prepaid Expenses.
B) deducting an increase in Salaries Payable.
C) deducting an increase in Accounts Receivable.
D) adding a decrease in Inventory.

Question

Quizplus · Accepted Answer

An increase in Salaries Payable should be added to net income, not deducted, because it represents expenses that have been incurred but not yet paid, thus increasing cash flow.

If the Indirect Method Is Used,each of the Following Is