A Company Uses the Indirect Method to Prepare the Statement

question 121

Multiple Choice

A company uses the indirect method to prepare the statement of cash flows.How will the adjustment to reflect the amount of cash received from customers be presented on the statement?

• A)The adjustment will be for the increase or decrease in accounts receivable for the period and will adjust net income in the operating activities section.
• B)The adjustment will be for the increase or decrease in accounts payable for the period and will adjust net income in the operating activities section.
• C)The adjustment will be for the increase or decrease in accrued expenses for the period and will adjust net income in the operating activities section.
• D)The adjustment will be for the increase or decrease in inventory for the period and will adjust net income in the operating activities section.

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