Krech Corporation's Comparative Balance Sheet Appears Below

question 70

Multiple Choice

Krech Corporation's comparative balance sheet appears below:
The company's net income (loss) for the year was ($3,000) and its cash dividends were $3,000. It did not sell or retire any property, plant, and equipment during the year. The company uses the indirect method to determine the net cash provided by operating activities.
-Which of the following is correct regarding the operating activities section of the statement of cash flows?

• A) The change in Accounts Receivable will be subtracted from net income; The change in Inventory will be added to net income
• B) The change in Accounts Receivable will be added to net income; The change in Inventory will be subtracted from net income
• C) The change in Accounts Receivable will be added to net income; The change in Inventory will be added to net income
• D) The change in Accounts Receivable will be subtracted from net income; The change in Inventory will be subtracted from net income