Asked by
Nicole Mendez
on Nov 13, 2024Verified
Which of the following would be added to net income using the indirect method?
A) An increase in accounts receivable
B) An increase in prepaid expenses
C) Depreciation expense
D) A decrease in accounts payable
Prepaid Expenses
Costs paid in advance for goods or services to be received in the future, treated as assets on the balance sheet.
Accounts Receivable
Sums due to a company from its clients for products or services that have been supplied or utilized but remain unpaid.
Net Income
The residual income of a company after total revenue has been diminished by all costs and taxes.
- Identify the adjustments needed to evolve net income into net cash provided from operations.
Verified Answer
BL
Learning Objectives
- Identify the adjustments needed to evolve net income into net cash provided from operations.