Starting with net income and adjusting it for items that affected reported net income but not cash is called the

Select one:

A. working capital method.

B. direct method.

C. indirect method.

D. cost-benefit method.

Which of the following would not appear in the operating activities section of a statement of cash flows prepared using the direct method?

Select one:

A. cash receipts from customers

B. cash paid for income taxes

C. gain on sale of equipment

D. cash paid to employees

In calculating net cash provided by operating activities using the indirect method, an increase in prepaid expenses during a period is

Select one:

A. added to net income.

B. ignored because it does not affect net income.

C. ignored because it does not affect expenses.

D. deducted from net income.