Chapter 16, Problem 10BQC

To determine

Concept Introduction:

Statement of Cash Flows: The Cash Flow Statement shows the inflow and outflow of Cash using three categories of cash flows: These categories are as follows:

1. Cash flow from Operating activities

2. Cash flow from Investing activities

3. Cash flow from Financing activities

The cash flow from Operating activities section of the Cash flow statement can be prepared using the direct or indirect method. Under the direct method, all the operating cash flows are directly entered in the cash flow statement. Under the indirect method, the operating cash flows are calculated by making some adjustments in the net income.

To identify: The adjustment of increase in accrued liabilities while preparing the Cash flow statement using the indirect method.