Which of the following items would be added to net income when using the indirect method of calculating cash flows provided by operating activities?
A)An increase in accounts payable
B)An increase in prepaid expenses
C)A decrease in accrued revenues
D)A decrease in taxes payable

Question

Quizplus · Accepted Answer

An increase in accounts payable indicates that expenses have been incurred but not yet paid in cash, which means cash is conserved, thus it is added back to net income in the cash flow statement.

Which of the Following Items Would Be Added to Net