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Jeremy, an accountant working for a large manufacturing business, is preparing the business’s cash flow statement using the indirect method. Which amount would Jeremy deduct from the net income amount?
A.
a decrease in salaries payable
B.
an increase in depreciation
C.
a decrease in inventory
D.
a decrease in prepaid rent
E.
an increase in short term loans

Respuesta :

waigeeferguson
Correct Answer is c because it is decreasing
Syd4r

Answer:

The correct answer is A: a decrease in salaries payable.

Explanation:

The two things that are deducted from the net income in the indirect method are: An increase in noncash current assets and Decrease in current liabilities. A is correct because salaries payable are a current liability so when they decrease, that is deducted from the net income.

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