On an indirect method statement of cash flows,a decrease in inventory would be:
A) netted against any decreases in accounts payable
B) deducted from net income
C) reflected in the investing activities section
D) added to net income

Question

Quizplus · Accepted Answer

A decrease in inventory indicates that inventory was sold, which increases cash flow. In the indirect method, this is added to net income to adjust for changes in working capital.

On an Indirect Method Statement of Cash Flows,a Decrease in Inventory