When the indirect method is used, if accounts receivable increases during the ac

Question

When the indirect method is used, if accounts receivable increases during the accounting period, the change in accounts receivable is A) added to net income B) added to the change in the cash account C) subtracted from the change in the cash account D) subtracted from net income When the indirect method is used, if accounts receivable increases during the accounting period, the change in accounts receivable is A) added to net income B) added to the change in the cash account C) subtracted from the change in the cash account D) subtracted from net income A) added to net income B) added to the change in the cash account C) subtracted from the change in the cash account D) subtracted from net income

Explanation / Answer

D) subtracted from net income

Increase in accounts receivable indicates the cash not collected from customer, which reduces the cash inflow .

D) subtracted from net income

Increase in accounts receivable indicates the cash not collected from customer, which reduces the cash inflow .

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