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Boreal Corporation is a private corporation reporting under ASPE and uses the indirect method when preparing its statement of cash flows.The company has engaged in the following transactions.For each transaction, indicate where it would be reflected on the statement of cash flows.
-An increase in inventory from year one to year two:
A)operating activities section
B)investing activities section
C)financing activities section
D)does not represent a cash flow

Question

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Boreal Corporation is a private corporation reporting under ASPE and uses the indirect method when preparing its statement of cash flows.The company has engaged in the following transactions.For each transaction, indicate where it would be reflected on the statement of cash flows.
-An increase in inventory from year one to year two:
A)operating activities section
B)investing activities section
C)financing activities section
D)does not represent a cash flow

Quizplus · Accepted Answer

An increase in inventory is considered a change in working capital, which is reflected in the operating activities section of the statement of cash flows under the indirect method.

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