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

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An increase in current assets such as accounts receivable, inventory, or prepaid expenses means that cash has been used to acquire these assets. Therefore, an increase in current assets results in a decrease in cash. This is reflected in the operating activities section of the cash flow statement when using the indirect method.

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