Question
When using the indirect method to prepare the statement of cash flows, a decrease in in Accrued Liabilities is ________.
Question content area bottom
Part 1
A.
subtracted in the investing activities section
B.
added in the investing activities section
C.
added in the operating activities section
D.
subtracted in the operating activities section
Question content area bottom
Part 1
A.
subtracted in the investing activities section
B.
added in the investing activities section
C.
added in the operating activities section
D.
subtracted in the operating activities section
Answers
GPT-4o mini
When using the indirect method to prepare the statement of cash flows, a decrease in Accrued Liabilities is:
**D. subtracted in the operating activities section.**
This is because a decrease in accrued liabilities means that the company has paid off some of its obligations, resulting in a cash outflow, which is subtracted from net income when adjusting for cash flows from operating activities.
**D. subtracted in the operating activities section.**
This is because a decrease in accrued liabilities means that the company has paid off some of its obligations, resulting in a cash outflow, which is subtracted from net income when adjusting for cash flows from operating activities.