How would the following information from the balance sheet be recorded in the cash flow statement (CFS)?

Hint: Think about increases and decreases in the account and the impact on cash inflows and outflows

Assets	Last Year	Now
Accounts Receivable	54,220	55,400
Prepaid Insurance	3,600	2,400

Question 4 options:

	Increase in A/R by $1,180 which is subtracted from Net Income under Operating Activities and Decrease in Prepaid Insurance by $1,200 which is added to Net Income under Operating Activities
	Increase in A/R by $1,180 which is added to Net Income under Operating Activities and Decrease in Prepaid Insurance by $1,200 which is subtracted from Net Income under Operating Activities
	Decrease in A/R by $1,180 which is subtracted from Net Income under Operating Activities and Increase in Prepaid Insurance by $1,200 which is added to Net Income under Operating Activities
	Decrease in A/R by $1,180 which is subtracted from Net Income under Operating Activities and Increase in Prepaid Insurance by $1,200 which is added to Net Income under Financing Activities