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 payable.
B) a decrease in accrued liabilities.
C) an increase in accounts receivable.
D) an increase in inventory.

Question

Quizplus · Accepted Answer

An increase in accounts payable is added back to net income in the indirect method of preparing the statement of cash flows because it represents cash that has not yet been paid out, thus not reducing the company's cash balance.

All of the Following Are Deducted from Net Income When