When using the indirect approach, which of the following would lead to a decrease in the cash flows from operations?

Question

Quizplus · Accepted Answer

When using the indirect approach, an increase in accounts receivable would lead to a decrease in cash flows from operations because it indicates that the company is not collecting its revenues in a timely manner, leading to a negative impact on cash flows. A decrease in accounts receivable would have the opposite effect and increase cash flows from operations. An increase in accounts payable or dividends paid typically does not directly impact cash flows from operations under the indirect approach.

When Using the Indirect Approach, Which of the Following Would