Upvote will be given if correct and complete:

B answer options:

1. - accrual basis

-cash basis

2. -they are earned

-cash is received

Cash Flows from Operating Activities-Indirect Method CashAccountsreceivable(net)MerchandiseinventoryPrepaidexpensesAccountspayable(merchandisecreditors)WagespayableEndofYear$54,53039,10053,3806,00051,09027,920BeginningofYear$49,62036,67055,8204,71046,94030,670 Statement of Cash Flows (partial) Cash flows from operating activities: Adjustments to reconcile net income to net cash flow from operating activities: Changes in current operating assets and liabilities: Net cash flow from operating activities b. Cash flows from operating activities differs from net income because it does not use the of accounting. For example revenues are recorded on the income statement when