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Nicole Mendez
on Nov 13, 2024

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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.
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Brett LowienNov 13, 2024
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