Under the indirect method, which of the following is NOT a proper adjustment to net income to arrive at net cash flow from operations?
A) Adding a decrease in inventory
B) Adding an increase in prepaid expense
C) Adding an increase in salaries payable
D) All are proper adjustments to net income.

Question

Quizplus · Accepted Answer

An increase in prepaid expenses should be subtracted from net income, not added, to adjust for cash flow from operations.

Under the Indirect Method, Which of the Following Is NOT