If the indirect method is used,which of the following would be subtracted from net income to arrive at net cash flows from operating activities?
A)Increase in Notes Payable.
B)Decrease in Inventory.
C)Decrease in Accounts Payable.
D)Depreciation Expense.

Question

Quizplus · Accepted Answer

When using the indirect method to calculate net cash flows from operating activities, decreases in accounts payable are subtracted from net income. This is because a decrease in accounts payable indicates that the company has paid off some of its liabilities, which is a use of cash, reducing the cash provided by operating activities.

If the Indirect Method Is Used,which of the Following Would