Which of the following would be added to net income in the operating activities section of a statement of cash flows prepared using the indirect method?
A) a decrease in accounts receivable.
B) an increase in prepaid expenses.
C) a decrease in accrued liabilities.
D) an increase in property, plant and equipment.

Question

Quizplus · Accepted Answer

A decrease in accounts receivable represents cash received from customers, which would be added to net income in the operating activities section.

Answer: C
 A decrease in accrued liabilities represents cash paid for expenses, which would be added to net income in the operating activities section.

B and D are not added to net income in the operating activities section using the indirect method.

Which of the Following Would Be Added to Net Income