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When preparing a reconciliation of net income to cash from operations, an increase in the ending inventory over the beginning inventory will result in an
When preparing a reconciliation of net income to cash from operations, an increase in the ending inventory over the beginning inventory will result in an adjustment to reported net income because the net increase in inventory is part of the difference between cost of goods sold and cash paid to suppliers. cash is increased because inventory is a current asset. all changes in noncash accounts must be disclosed. inventory is an expense deducted in computing net earnings, but is not a use of cash
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