Company B
the Following Chart Represents Company B's Operating Activities

Company B
The following chart represents Company B's operating activities section of a statement of cash flows for Year 1:
$\begin{array}{llr} \underline{\text { Operating activities: }}\\\text { Net income } & \$ 120,000 \\\text { Add: } & \text { Depreciation } & 10,000 \\& \text { Decrease in accounts receivable } & \underline{ 5,000} \\ & & \$ 135,000 \\\text { Deduct: } & \text { Decrease in accounts payable } & \underline{15,000} \\& \text { Net cash inflow from operating activities } & \underline{\$ 120,000}\end{array}$
-Refer to the figure Company B.Which method of preparing the operating activities section was used?

A) direct method
B) indirect method
C) balance sheet method
D) retained earnings method