Question

Which of the following is added to net income as an adjustment under the indirect method of preparing the statement of cash flows?
Salaries payable increase.

Answer 1

Salaries payable increase is added to net income as an adjustment under the indirect method of preparing the statement of cash flows.

What is the purpose of cash flow statement?

A cash flow statement's goal is to give a thorough account of what happened to a company's cash over a given time period, also referred to as the accounting period. Based on how much money is coming into and going out of the company, it shows how well a company can operate both short- and long-term.

Where does the increase in accounts payable appear on the cash flow statement?

On the other hand, if a current liability item-such as accounts payable—increases, this is regarded as a cash inflow because the company now has more money to invest in its operations. The net income is then increased as a result.

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