Which of the following statements about cash flows from operating activities,in a statement of cash flows prepared under the indirect method,is correct?
A)An increase in trade receivables would be subtracted from profit.
B)An increase in salaries payable would be subtracted from profit.
C)An increase in inventory would be added to profit.
D)Depreciation expense would be subtracted from profit.

Question

Quizplus · Accepted Answer

Under the indirect method, an increase in trade receivables is subtracted from profit because it represents sales that have not yet been collected in cash, reducing cash flow.

Which of the Following Statements About Cash Flows from Operating