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Problem 1: A company that had a $500 increase in accounts receivable during a period would do which of the following on its statement of cash flows prepared using the indirect method?
a. Add the $500 to net income in order to arrive at net cash provided by operating activities.
b. Deduct the $500 from net income in order to arrive at net cash provided by operating activities.
c. Show the $500 in an accompanying schedule as a direct exchange transaction.
d. Show nothing relating to the $500 either on the statement of cash flows or any schedule accompanying the statement of cash flows.
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