Indicate whether each of the following would be added to or subtracted from net income when using the indirect method to reconcile net income to cash flows from operating activities.Item Required to Convert Net Income to Cash Flows From Operating ActivitiesAdded to or Subtracted FromIncrease in Accounts Receivable?Decrease in Accounts Payable?Decrease in Inventory?Increase in Accrued Expenses?Depreciation Expense?Increase in Prepaid Expenses?
What will be an ideal response?
| Item Required to Convert Net Income to Cash Flows From Operating Activities | Added to or Subtracted From |
| Increase in Accounts Receivable | Subtract |
| Decrease in Accounts Payable | Subtract |
| Decrease in Inventory | Add |
| Increase in Accrued Expenses | Add |
| Depreciation Expense | Add |
| Increase in Prepaid Expenses | Subtract |
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