Direct versus Indirect Method For each of the following items, indicate whether it would appear on a statement of cash flows prepared using the direct method (D) or the indirect method (I).

1. Net income 2. Increase in accounts receivable 3. Collections on accounts receivable 4. Payments on accounts payable 5. Decrease in accounts payable 6. Depreciation expense 7. Gain on early retirement of bonds 8. Cash sales