In a statement of cash flows prepared by the indirect method, an increase in accounts receivable should be

A) deducted from net income in the operating activities section
B) added to net income in the operating activities section
C) reported as an inflow in the investing activities section
D) reported as an inflow in the financing activities section

Indirect Method

A approach used in cash flow statements to adjust net income for the effects of non-cash transactions and changes in working capital.

Operating Activities

Operating activities involve the primary revenue-generating activities of an organization, including production, sales, and delivery of the company’s product as well as administrative and general expenses.