Of the following,which has a negative effect on the computation of cash flow from operations using the indirect method?
A)Increase in Accounts Payable
B)Increase in Inventory
C)Increase in Notes Payable
D)Depreciation Expense

Question

Quizplus · Accepted Answer

An increase in inventory means more cash was used to purchase inventory, which is reflected in the change in inventory on the balance sheet. This increase must be subtracted from net income when calculating cash flow from operations using the indirect method.

Of the Following,which Has a Negative Effect on the Computation