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Mthethwa Nothando
on Nov 15, 2024

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Blair Corporation's Accounts Receivable decreased by $15,000 during the year. What is the adjustment to the cash flow statement when it is prepared by the indirect method?

A) Subtract the increase from the net income in the operating activities section.
B) Add the increase to the net income in the operating activities section.
C) Add the decrease in the investing activities section.
D) Subtract the increase in the financing activities section.

Accounts Receivable

Funds that customers owe to a business for products or services that have been provided but remain unpaid.

Indirect Method

A way of preparing the cash flow statement where net income is adjusted for non-cash transactions to calculate net cash from operating activities.

Operating Activities

Transactions related to the primary activities of a business, such as selling goods and services, which are reflected in the cash flow statement.

  • Examine the effects of different transactions on operational cash flow through the application of the indirect method.
  • Analyze the impact of variations in accounts receivable and inventory on cash flow.
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Laura MoehrNov 15, 2024
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