Shoshoni Corporation prepares its statement of cash flows using the indirect method. Which of the following...
Shoshoni Corporation prepares its statement of cash flows using the indirect method. Which of the following would be added to net income in the operating activities section of the statement?
|
Increase in Accounts Receivable |
Decrease in Accounts Payable |
|
| A) | Yes | Yes |
| B) | Yes | No |
| C) | No | Yes |
| D) | No | No |
Homework Answers
Correct answer------------(D) NO and NO
.
.Increase in accounts receivable and decease in accounts payable both represents outflow of cash hence they are deducted from Net income in calculating cash from operating activities.
Cash is increased when Current liability increase or Current asset
Decrease.
Cash is Decreased when Current liability Decrease or Current asset
Increase.
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