Question: Assuming a company uses the indirect method in the operating activities section of the statement of cash flows, answer the following questions. 1. Why is

Assuming a company uses the indirect method in the operating activities section of the statement of cash flows, answer the following questions.

1. Why is an increase in accounts receivable a subtraction when adjusting from net income to operating cash flow?

2. Why is a decrease in accounts payable a subtraction when adjusting from net income to operating cash flow?

3. Why is stock-based compensation an addition when adjusting from net income to operating cash flow?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Q:

Please help REQUIREMENT 2 Assuming a company uses the indirect method in the operating activities section of the statement of cash ows, answer the following questions. 1. Why is an increase in...

Q:

Assuming a company uses the indirect method in the operating activities section of the statement of cash flows , answer the following: 1. Why is an increase in accounts receivable a subtraction when...

Q:

Sanchez Company sold some excess equipment at a loss during the current year. The following information was collected from the company's accounting records: No new equipment was bought during the...

Q:

Sanchez Company sold some excess equipment at a loss during the current year. The following information was collected from the company's accounting records: No new equipment was bought during the...

Q:

Sanchez Company sold some excess equipment at a loss during the current year. The following information was collected from the company's accounting records: No new equipment was bought during the...

Q:

Background: he ability to manage cash fow s essental for businesses. Many small businesses fal because they are unable to manage the ups and downs of periodic cash fows. Listed below are ams that a...

Q:

Sanchez Company sold some excess equipment at a loss during the current year. The following information was collected from the companys accounting records: From the Statement of Earnings Depreciation...

Q:

Classification of Activities for Carnival Corporation Carnival Corporation & plc is one of the largest cruise companies in the world with such well-known brands as Carnival Cruise Lines, Holland...

Q:

Carnival Corporation & plc is one of the largest cruise companies in the world with such well-known brands as Carnival Cruise Lines, Holland America Line, and Princess Cruises. Classify each of the...

Q:

Carnival Corporation & plc is one of the largest cruise companies in the world with such well-known brands as Carnival Cruise Lines, Holland America Line, and Princess Cruises. Classify each of the...

Q:

In 2020, Quapau Products introduced a new line of hot water heaters that carry a one-year warranty against manufacturer's defects. Based on industry experience, warranty costs were expected to...

Q:

What are some important features of integrated accounting software for small businesses? Why are they important?

Q:

A beneficiary withdraws funds from a qualified tuition plan, also known as a 5 2 9 plan, for an eligible college expense. How will the withdrawal be taxed on the federal level? A The principal and...

Q:

Within a continuously competitive global business environment, publicly held companies face constant pressure to generate and report positive financial results. Unfortunately, some leaders may be...

Q:

4.7 A presidential election poll contacts 2,000 randomly selected people. Should the number of people that support candidate A be analyzed using discrete or continuous probability models?

Q:

4.4 An equity actor auditions 100 times a year and obtains a contract for a play 8% of the time. Is her work schedule (number of plays) a discrete or random variable?

Q:

4.3 For each of the following, indicate if a discrete or a continuous random variable provides the best definition: a. The number of cars that arrive each day for repair in a two-person repair shop...