MC Qu. 57 Excerpts from Neuwirth Corporation... Which of the following is the co

Question

MC Qu. 57 Excerpts from Neuwirth Corporation...

Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method?

The change in Accounts Receivable is subtracted from net income; The change in Inventory is subtracted from net income

The change in Accounts Receivable is subtracted from net income; The change in Inventory is added to net income

The change in Accounts Receivable is added to net income; The change in Inventory is subtracted from net income

The change in Accounts Receivable is added to net income; The change in Inventory is added to net income

Explanation / Answer

Answer: The change in Accounts Receivable is added to net income; The change in Inventory is added to net income

Because Decrease in account receivable and decrease in inventory is added in net income.

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