Virginia Company Uses the Indirect Method to Prepare the Statement

Multiple Choice

Virginia Company uses the indirect method to prepare the statement of cash flows.Refer to the following section of the comparative balance sheet: $\begin{array}{c}\text { Virginia Corp.}\\ \text { Comparative Balance Sheet}\\\text { December 31,2018 and 2017}\\\begin{array}{|l|r|r|r|}\hline&2018&2017&\text { Increase/(Decrease) }\\\hline \text { Accounts Payable } & \$ 4,000 & \$ 6,000 & \$(2,000) \\\hline \text { Accrued Liabilities } & 2,000 & 1,000 & 1,000 \\\hline \text { Long-term Notes Payable } & \underline{84,000} & \underline{90,000} & \underline{(6,000) } \\\hline \text { Total Liabilities } & \$ 90,000 & \$ 97,000 & \$(7,000) \\\hline \end{array}\end{array}$ How will the change in Accounts Payable be shown on the statement of cash flows?

A) as an addition to Net Income
B) as a deduction from Net Income
C) as a deduction from investing cash flows
D) as an addition to operating cash flows