Question: When using the indirect method to complete the cash flows from operating activities section, what is the proper treatment for an increase in the Inventory

When using the indirect method to complete the cash flows from operating activities section, what is the proper treatment for an increase in the Inventory account?

Multiple Choice

  • a. Deduct the increase to cash payments to suppliers

  • b. Add the increase to net income

  • c. Add the increase to cash collections from customers

  • d. Deduct the increase from net income

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