Operating Activities: Indirect Method Video Lessons

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Problem: Which of the following statements about cash flows from operating activities, in a statement of cash flows prepared under the indirect method, is correct?  A. An increase in accounts receivable would be subtracted from net income. B. An increase in salaries payable would be subtracted from net income. C. An increase in inventory would be added to net income. D. Depreciation expense would be subtracted from net income.

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Which of the following statements about cash flows from operating activities, in a statement of cash flows prepared under the indirect method, is correct? 

A. An increase in accounts receivable would be subtracted from net income.

B. An increase in salaries payable would be subtracted from net income.

C. An increase in inventory would be added to net income.

D. Depreciation expense would be subtracted from net income.

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