The Accounts Receivable balance has decreased during the year.How would this affect the Statement of Cash Flows operations section under the indirect method?

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Decrease in Accounts Receivable implies that less cash has been received from customers than the revenue recognized in the Income Statement. As the Net Income is calculated based on accrual accounting principles, it includes the revenue recognized even if the payment from customers has not been received. Therefore, to arrive at the actual cash received from operations, the decrease in Accounts Receivable needs to be added back to net income. It is done while preparing the Operations Section under the Indirect method of the Statement of Cash Flows.

The Accounts Receivable Balance Has Decreased During the Year