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Assume the indirect method is used to compute cash flows from operations. For each item listed below, indicate the effect on net income in arriving at cash flows from operations by selecting one of the following code.
Code
Cash Flows from Operating Activities
Add to Net Income A
Deduct from Net Income D
1. A decrease in accounts receivable
2. Increase in inventory
3. Increase in prepaid expenses
4. A decrease in accounts payable
5. Decrease in accrued liabilities
6. Increase in income taxes payable
7. Depreciation expense
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