Asked by
Milcah Guevarra
on Nov 14, 2024
Verified
Under the indirect method, an increase in accounts payable during a period is deducted from net income in calculating cash provided by operating activities.
Accounts Payable
Liabilities of a business that are owed to creditors for goods and services purchased on credit.
Net Income
The total profit of a company after all expenses, taxes, and costs have been subtracted from total revenues.
- Comprehend the differences between the direct and indirect methods of reporting cash flows from operating activities.
- Understand the adjustments required to reconcile net income to net cash provided by operating activities under the indirect method.
Verified Answer
DA
Learning Objectives
- Comprehend the differences between the direct and indirect methods of reporting cash flows from operating activities.
- Understand the adjustments required to reconcile net income to net cash provided by operating activities under the indirect method.
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