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Indicate Whether Each of the Following Would Be Added to or Subtracted

Question 195

Essay

Indicate whether each of the following would be added to or subtracted from net income when using the indirect method to reconcile net income to cash flows from operating activities.
 Item Required to Convert Net Income to Cash Flows From  Operating Activities  Added to or  Subtracted From  Increase in Accounts Receivable  Decrease in Accounts Payable  Decrease in Inventory  Increase in Accrued Expenses  Depreciation Expense  Increase in Prepaid Expenses \begin{array} { | l | c | } \hline { \begin{array} { c } \text { Item Required to Convert Net Income to Cash Flows From } \\\text { Operating Activities }\end{array} } & \begin{array} { c } \text { Added to or } \\\text { Subtracted From }\end{array} \\\hline \text { Increase in Accounts Receivable } & \\\hline \text { Decrease in Accounts Payable } & \\\hline \text { Decrease in Inventory } & \\\hline \text { Increase in Accrued Expenses } & \\\hline \text { Depreciation Expense } & \\\hline \text { Increase in Prepaid Expenses } & \\\hline\end{array}

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