In converting net income to net cash provided by operating activities under the indirect method:

A) decreases in accounts receivable and increases in prepaid expenses are added.
B) decreases in inventory and increases in accrued liabilities are added.
C) decreases in accounts payable and decreases in inventory are deducted.
D) increases in accounts receivable and increases in accrued liabilities are deducted.

Indirect Method

In accounting, this method is used in cash flow statements to convert net income into net cash flow from operating activities by adjusting for non-cash transactions.

Accounts Receivable

Financial obligations of customers to a firm for delivered or utilized goods or services awaiting payment.

Accrued Liabilities

Liabilities recorded on a company's balance sheet for expenses that have been incurred but not yet paid, capturing the company's financial obligations at a particular point in time.