Which of the following,under the indirect method,is not a proper adjustment to net income to arrive at cash flow from operations?
A)Adding a decrease in inventory
B)Adding an increase in salaries payable
C)Deducting a increase in prepaid expense
D)All are proper adjustments to net income.

Question

Quizplus · Accepted Answer

All the options listed (A, B, and C) are proper adjustments to net income when calculating cash flow from operations using the indirect method. The indirect method starts with net income and then adjusts for changes in balance sheet accounts that affect cash.

Which of the Following,under the Indirect Method,is Not a Proper