Which of the following would be subtracted from net income using the indirect method?

A) Depreciation expense
B) An increase in accounts receivable
C) An increase in accounts payable
D) A decrease in prepaid expenses

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future, recorded as assets on the balance sheet until they are consumed or used.

Accounts Receivable

The amount owed to a business by its customers for goods or services that have been delivered but not yet paid for.

Net Income

The total revenue minus expenses, taxes, and costs, representing the profit of a company over a specific time period.