In creating a cash flow statement using the indirect method,we consider that a decrease in current liabilities causes an increase in cash.

Name: In creating a cash flow statement using the indirect method,we consider that a decrease in current liabilities causes an increase in cash.
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Question

Quizplus · Accepted Answer

A decrease in current liabilities indicates that the company has paid off some of its liabilities, which results in a cash outflow, not an increase in cash.

In Creating a Cash Flow Statement Using the Indirect Method,we