Which of the following statements does not correctly describe an adjustment to net income when determining cash flows from operating activities when using the indirect method?
A)An increase in accounts receivable will be deducted from net income.
B)A loss on the sale of a depreciable asset will be added to net income.
C)An increase in accrued liabilities will be deducted from net income.
D)An increase in accounts payable will be added to net income.

Question

Quizplus · Accepted Answer

Under the indirect method, an increase in accrued liabilities will be added to net income, because accrued expenses were greater than the related cash payments.

Which of the Following Statements Does Not Correctly Describe an Adjustment