A decrease in accounts receivable should be presented in a statement of cash flows (indirect method)as
A) an inflow and outflow of cash.
B) an outflow of cash.
C) a deduction from net income.
D) an addition to net income.

Question

Quizplus · Accepted Answer

A decrease in accounts receivable indicates that cash has been collected from customers, which increases the cash flow. Therefore, it is added back to net income in the indirect method of preparing the statement of cash flows.

A Decrease in Accounts Receivable Should Be Presented in a Statement