An increase in accrued liabilities of $1,000 during a 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 $1,000 in order to arrive at net cash provided by operating activities.
B) a deduction from net income of $1,000 in order to arrive at net cash provided by operating activities.
C) a deduction of $1,000 under investing activities.
D) an addition of $1,000 under financing activities.

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Cassy Kather · Accepted Answer

Final Answer : A, Explanation :  An increase in accrued liabilities indicates that the company has incurred expenses that have not yet been paid in cash, effectively increasing cash flow. Under the indirect method on the statement of cash flows, this is shown as an addition to net income to arrive at net cash provided by operating activities.

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