To prepare the statement of cash flows using the indirect method ________.
A)an increase in inventory is subtracted from net income
B)a purchase of a machine is added to net income
C)cash paid for dividends is subtracted from net income
D)an increase in accounts payable is subtracted from net income

Question

Quizplus · Accepted Answer

In the indirect method, an increase in inventory is subtracted from net income because it represents a use of cash that is not reflected in the net income.

To Prepare the Statement of Cash Flows Using the Indirect