When using the indirect method of preparing a statement of cash flows, which of the following items would need to be deducted from net income in order to reconcile to cash provided by operating activities?

Question

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When using the indirect method, increases in accounts receivable indicate that more revenue has been recognized than cash received, thus it needs to be deducted from net income to reconcile to cash provided by operating activities.

When Using the Indirect Method of Preparing a Statement of Cash