Walker Corp.uses the indirect method to prepare the statement of cash flows.Refer to the following section of the comparative balance sheet:
-How will the change in Accounts Receivable be shown on the statement of cash flows?

Question

Walker Corp.uses the indirect method to prepare the statement of cash flows.Refer to the following section of the comparative balance sheet:  
-How will the change in Accounts Receivable be shown on the statement of cash flows?

Quizplus · Accepted Answer

The change in Accounts Receivable would be shown as a negative cash flow under the operating activities section of the statement of cash flows, as an increase in Accounts Receivable would mean that the company has earned revenue but has not yet received cash payment. Therefore, an increase in Accounts Receivable would result in a decrease in cash flow from operating activities.