When the indirect method is used,details from which of the following balance sheet accounts are used in calculating both operating and financing cash flows?
A)Bonds Payable
B)Taxes Payable
C)Retained Earnings
D)Common Stock

Question

Quizplus · Accepted Answer

The details from the Retained Earnings account is used in calculating both operating and financing cash flows.Net income increases Retained Earnings and dividends decrease Retained Earnings.Net income is the starting point for calculating cash flows from operating activities,and the payment of cash dividends is a cash outflow reported in the financing activities section of the statement of cash flows.

When the Indirect Method Is Used,details from Which of the Following