Which of the following adjustments to net income is NOT correct if you want to calculate cash flow from operating activities?
A)Add increases in accounts payable
B)Add increases in accounts receivable
C)Add back depreciation
D)Depreciation is deducted when calculating net income

Question

Quizplus · Accepted Answer

Increases in accounts receivable are subtracted, not added, when adjusting net income to calculate cash flow from operating activities because it represents income that has been recognized but not yet received in cash.

Which of the Following Adjustments to Net Income Is NOT