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)an increase in accrued liabilities.
D)an increase in property, plant and equipment.

Question

Quizplus · Accepted Answer

A decrease in accounts receivable would result in an increase in cash flow from operating activities because it means that the company has collected more cash from customers than it earned in revenue during the period. Prepaid expenses, accrued liabilities, and property, plant, and equipment are not directly related to cash flow from operating activities.

Which of the Following Would Be Added to Net Income