When Preparing a Statement of Cash Flows Using the Indirect

When preparing a statement of cash flows using the indirect method, an increase in inventory will result in an adjustment to reported net income because

A) cost of goods sold on an accrual basis is less than on a cash basis.
B) inventory was paid for with cash, but is still on hand at the end of the period.
C) acquisition of inventory is an investment activity.
D) inventory purchased created smaller cash outflows than cash inflows received from inventory sales.