Excerpts from Neuwirth Corporation's comparative balance sheet appear below: Ending BalanceBeginning BalanceCash and cash equivalents$37,000 $27,000 Accounts receivable$24,000 $28,000 Inventory$65,000 $68,000 Which of the following is the correct treatment within the operating activities section of the statement of cash flows using the indirect method?
A. The change in Accounts Receivable is added to net income; The change in Inventory is subtracted from net income
B. The change in Accounts Receivable is subtracted from net income; The change in Inventory is added to net income
C. The change in Accounts Receivable is subtracted from net income; The change in Inventory is subtracted from net income
D. The change in Accounts Receivable is added to net income; The change in Inventory is added to net income
Answer: D
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