When preparing the statement of cash flows by the indirect method, if current li

Question

When preparing the statement of cash flows by the indirect method, if current liabilities increase the difference is A. Added to net income B. Added to investments C. Deducted from net income D. Subtracted from investments When preparing the statement of cash flows by the indirect method, if current liabilities increase the difference is A. Added to net income B. Added to investments C. Deducted from net income D. Subtracted from investments A. Added to net income B. Added to investments C. Deducted from net income D. Subtracted from investments

Explanation / Answer

When preparing the statement of cash flows by the indirect method, if current liabilities increase the difference i

A. Added to net income Because it will increase in current assets due to increase liquidity and liabilitie are thing which firm have to pay, until the firm has not pay its liabilities it will always become an income for firm.

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