Asked by
Yasmine Kasem
on Oct 09, 2024
Verified
Under the indirect method of determining the net cash provided by operating activities on the statement of cash flows, a decrease in inventory would be added to net income.
Indirect Method
An approach used in cash flow statements to adjust net income for changes in non-cash items to calculate cash provided by operating activities.
Operating Activities
Transactions and events that pertain to the core business functions of an organization, influencing net income.
Inventory Decrease
A reduction in the quantity of goods held in stock by a company.
- Acquire a grasp of the parts and their categories within the cash flow statement.
- Adopt the indirect procedure to identify net cash provided by operating activities, factoring in appropriate adjustments.
- Comprehend the significance of changes in accounts receivable, inventory, and other current assets and liabilities on cash flows.
Verified Answer
CB
Learning Objectives
- Acquire a grasp of the parts and their categories within the cash flow statement.
- Adopt the indirect procedure to identify net cash provided by operating activities, factoring in appropriate adjustments.
- Comprehend the significance of changes in accounts receivable, inventory, and other current assets and liabilities on cash flows.
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