Under the indirect method,an increase in prepaid rent is added to net income to arrive at net cash flows from operating activities.

Name: Under the indirect method,an increase in prepaid rent is added to net income to arrive at net cash flows from operating activities.
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Question

Quizplus · Accepted Answer

An increase in prepaid rent represents a use of cash, and therefore should be subtracted from net income to arrive at net cash flows from operating activities under the indirect method.

Under the Indirect Method,an Increase in Prepaid Rent Is Added