The most recent comparative balance sheet of Giacomelli Corporation appears below: The company uses the indirect method to construct the operating activities section of its statements of cash flows. Which of the following is correct regarding the operating activities section of the statement of cash flows?
A)The change in Accounts Receivable will be subtracted from net income; The change in Inventory will be added to net income
B)The change in Accounts Receivable will be added to net income; The change in Inventory will be subtracted from net income
C)The change in Accounts Receivable will be added to net income; The change in Inventory will be added to net income
D)The change in Accounts Receivable will be subtracted from net income; The change in Inventory will be subtracted from net income

Question

The most recent comparative balance sheet of Giacomelli Corporation appears below:  The company uses the indirect method to construct the operating activities section of its statements of cash flows. Which of the following is correct regarding the operating activities section of the statement of cash flows?
A)The change in Accounts Receivable will be subtracted from net income; The change in Inventory will be added to net income 
B)The change in Accounts Receivable will be added to net income; The change in Inventory will be subtracted from net income 
C)The change in Accounts Receivable will be added to net income; The change in Inventory will be added to net income 
D)The change in Accounts Receivable will be subtracted from net income; The change in Inventory will be subtracted from net income

Quizplus · Accepted Answer

The Answer of The most recent comparative balance sheet of Giacomelli Corporation appears below:  The company uses the indirect method to construct the operating activities section of its statements of cash flows. Which of the following is correct regarding the operating activities section of the statement of cash flows?
A)The change in Accounts Receivable will be subtracted from net income; The change in Inventory will be added to net income 
B)The change in Accounts Receivable will be added to net income; The change in Inventory will be subtracted from net income 
C)The change in Accounts Receivable will be added to net income; The change in Inventory will be added to net income 
D)The change in Accounts Receivable will be subtracted from net income; The change in Inventory will be subtracted from net income

The Most Recent Comparative Balance Sheet of Giacomelli Corporation Appears