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

Question

Quizplus · Accepted Answer

In the indirect method, a decrease in Inventory is added to net income because it indicates that cash was not used to purchase inventory, thus increasing cash flow.

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