Which of the following is subtracted from income when using the indirect method to determine cash flows from operations? A decrease in accounts payable Depreciation Cash dividends declared and distributed Amounts due from customers at year-end None of these choices is correct.

Which of the following is subtracted from income when using the indirect method to determine cash flows from operations? A decrease in accounts payable Depreciation Cash dividends declared and distributed Amounts due from customers at year-end None of these choices is correct.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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QUESTION 5

Which of the following is subtracted from income when using the indirect method to determine cash flows from operations?

		A decrease in accounts payable
		Depreciation
		Cash dividends declared and distributed
		Amounts due from customers at year-end
		None of these choices is correct.

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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