Chapter 12, Problem 12.2ME

Determining the Effects of Account Changes on Cash Flow from Operating Activities

(Indirect Method)

Indicate whether each item would be added (+) or subtracted (−) in the computation of cash flow from operating activities using the indirect method.

_______ 1. Accrued expenses (increase).

_______ 2. Inventories (increase).

_______ 3. Accounts receivable (decrease).

_______ 4. Accounts payable (decrease).

_______ 5. Depreciation, depletion, and amortization.