Ingles Corp., a private company reporting under ASPE, engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows. Assume the indirect method is used. Ingles Corp. experienced an increase in inventory in the
A) operating activities section.
B) investing activities section.
C) financing activities section.
D) does not represent a cash flow.

Question

Quizplus · Accepted Answer

An increase in inventory is an operating activity as it affects working capital and is adjusted in the operating activities section when using the indirect method.