When accrued liabilities increase from the beginning to the end of the year,it means accrued expenses were greater than cash payments of such expenses,and,under the indirect method,the increase in accrued liabilities would be added to net income to convert to cash flow from operating activities.

Accrued Liabilities

Expenses that have been incurred but have not been paid at the end of the accounting period.

Indirect Method

A accounting technique used to prepare the cash flow statement, converting net income into net cash flow from operating activities by adjusting for non-cash items and changes in working capital.

Net Income

Total earnings of a company after all expenses and taxes have been deducted from total revenue.