Under the indirect method of determining the net cash provided by operating activities on the statement of cash flows, an increase in accounts receivable would be subtracted from net income.

Indirect Method

A way of preparing a cash flow statement where net income is adjusted for changes in balance sheet accounts to calculate cash flow from operating activities.

Operating Activities

Transactions and events related to the primary operations of a business, such as revenue from sales and expenses from operations.

Accounts Receivable

Money owed to a company by its customers for goods or services that have been delivered but not yet paid for.