Question

When preparing the statement of cash flows using the indirect​ method, a decrease in current liabilities is added to the net income to arrive at net cash provided by operating activities.
a) true
b) false

Answer 1

Answer:

b) false

Explanation:

Operating activities: It contains those transactions that affect the after-net income working capital. It would subtract the increase in current assets and a decline in current liabilities, while adding the reduction in current assets and a rise in current liabilities.

Therefore, the given statement is false.