Using the indirect method, where does the decrease in accounts receivable appear in a consolidated statement of cash flows?
A) $8,000 increase to net income as an operating activity.
B) $8,000 decrease to net income as an operating activity.
C) $6,400 increase to net income as an operating activity.
D) $6,400 decrease to net income as an operating activity.
E) $8,000 increase as an investing activity.

Question

Quizplus · Accepted Answer

A decrease in accounts receivable is added to net income in the operating activities section of the cash flow statement, as it represents cash collected that was previously recorded as revenue.

Using the Indirect Method, Where Does the Decrease in Accounts