Question

When preparing the operating activities section of the statement of cash flows using the indirect method, adding a decrease in Accounts Receivable to net income allows the inclusion of transactions that ______. Multiple choice question. increased cash, but did not affect net income decreased cash, but did not affect net income increased cash and increased net income decreased cash and decreased net income

Answer 1

When preparing the operating activities section of the statement of cash flows using the indirect method, adding a decrease in Accounts Receivable to net income allows the inclusion of transactions that increased cash, but did not affect net income decreased cash. Option A. is the correct answer.

What is a net income?

In business and accounting, net income is an entity's income minus cost of goods sold, expenses, depreciation and amortization, interest, and taxes for an accounting period.

Therefore, the correct answer is as given above.

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