All of the following are deducted from net income when preparing the statement of cash flows under the indirect method except:
A) an increase in accounts payableAccounts Payable.
B) a decrease in Accrued Liabilities.
C) an increase in accounts receivableAccounts Receivable.
D) an increase in Iinventory.

Question

Quizplus · Accepted Answer

Net cash flow from operating activities = Net income +/- Adjustments to reconcile net income to net cash flow from operating activities
Net cash flow from operating activities = Net income - Increase in current assets + Decrease in current assets + Increase in current liabilities - Decrease in current liabilities + Depreciation expense - Gain on sale of equipment + Loss on sale of equipment
Given the answer choices:
Net cash flow from operating activities = Net income - Increase in current assets (such as Accounts Receivable or Inventory)+ Increase in current liabilities (such as Accounts Payable)- Decrease in current liabilities (such as Accrued Liabilities)

All of the Following Are Deducted from Net Income When