Under the indirect method, an increase in Wages Payable would be added back to net income when calculating net cash flow from operating activities.

Question

Quizplus · Accepted Answer

This is because an increase in Wages Payable indicates that wages have been recognized as an expense but have not yet been paid out, which means they should be added back to net income to reflect the cash outflow for these expenses.

Under the Indirect Method, an Increase in Wages Payable Would