Avatar Company uses the indirect method to prepare the statement of cash flows. Please refer to the following section of the comparative balance sheet:
|
2014 |
2013 |
Increase/decrease |
Cash |
$ 33,000 |
$ 18,000 |
$ 15,000 |
account receivable |
$ 22,000 |
$ 35,000 |
$ (13,000) |
Inventory |
$ 170,000 |
$ 115,000 |
$ 55,000 |
Total assets |
$ 225,000 |
$ 168,000 |
$ 57,000 |
The change in accounts receivable will be shown as a positive cash flow in the adjustments to Net income.
· True
· False
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