An Increase in the Inventory Account of a Company from $10,000

question 78

Multiple Choice

An increase in the Inventory account of a company from $10,000 at the beginning of the year to $15,000 at the end of the year would be shown on the company's statement of cash flows prepared under the indirect method as:

• A)an addition to net income of $5,000 in order to arrive at net cash provided by operating activities.
• B)a deduction from net income of $5,000 in order to arrive at net cash provided by operating activities.
• C)an addition to net income of $15,000 in order to arrive at net cash provided by operating activities.
• D)a deduction from net income of $10,000 in order to arrive at net cash provided by operating activities.