Current liabilities decreased by $1,000 How much is the net cash provided by operating activities?

Question

Quizplus · Accepted Answer

Since current liabilities decreased, it means the company paid off some of its debts, which is a cash outflow. Therefore, we need to add $1,000 to the net income to adjust for the decrease in current liabilities. 
Net Cash Provided by Operating Activities = Net Income + Decrease in Current Liabilities 
= Net Income + (-$1,000) 
= $28,000 + (-$1,000) 
= $27,000 
Therefore, the correct choice is C)$29,000.

Current Liabilities Decreased by $1,000 How Much Is the Net