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Question

Cat Nap Corp. uses the indirect method to prepare the statement of cash flows. Refer to the following section of the comparative balance sheet:

   Cat Nap Corp.
   Comparative Balance Sheet
   December 31, 2017 and 2016
   2017   2016   Increase/(Decrease)
Cash   $45,000   $27,000   $18,000
Accounts Receivable   48,000   45,000   3,000
Merchandise Inventory   180,000   132,000   48,000
Total Assets   $273,000   $204,000   $69,000

How will the change in Accounts Receivable be shown on the statement of cash flows?
A) positive cash flow under the financing activities section
B) negative cash flow under the investing activities section
C) subtraction from net income under the operating activities section
D) addition to net income under the operating activities section

Answer

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