Which of the following is correct regarding the operating activities section of

Question

Which of the following is correct regarding the operating activities section of the statement of cash flows?

The change in Accounts Payable will be added to net income; The change in Accrued Liabilities will be subtracted from net income

The change in Accounts Payable will be subtracted from net income; The change in Accrued Liabilities will be added to net income

The change in Accounts Payable will be subtracted from net income; The change in Accrued Liabilities will be subtracted from net income

The change in Accounts Payable will be added to net income; The change in Accrued Liabilities will be added to net income

Explanation / Answer

Since increase in current liabilities are added to the net income. Therefore the statement that change in Accounts Payable will be added to net income; The change in Accrued Liabilities will be added to net income is correct .

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