Flannery Company uses a worksheet to prepare its statement of cash flows.The company also uses the indirect method for the Operating Activities section of its statement.For each of the following changes in the balance sheet, indicate what activity it affects and whether it is an addition or deduction.
-Accounts Receivable increased
A)Deducted from Operating activity
B)Added to Operating activity
C)Deducted from Investing activity
D)Added to Investing activity
E)Deducted from Financing activity
F)Added to Financing activity

Question

Quizplus · Accepted Answer

An increase in Accounts Receivable would be deducted from Operating activities as it represents an increase in cash that has not yet been received from customers.

Flannery Company Uses a Worksheet to Prepare Its Statement of Cash