If the calculation of cash flows from operating activities starts with net income,the company:
A)is using the net income method.
B)will remove the effects of all noncash items included in the calculation of net income.
C)is using the direct method.
D)will add all noncash items not included in the calculation of net income.

Question

Quizplus · Accepted Answer

Using the indirect method,the calculation of cash flows from operating activities begins with net income and then adjustments are made to eliminate the effects of items that do not involve cash.

If the Calculation of Cash Flows from Operating Activities Starts