Which of the following is a way that the Operating Activity section of the statement of cash flows adjusts Net Income from the balance sheet?
A)It adds the cash that flows from investors to the firm.
B)It adds all non-cash entries related to the firm's operating activities.
C)It removes the cash used for investment purposes.
D)It subtracts all expenses and costs related to the firm's operating activities.

Question

Quizplus · Accepted Answer

The Operating Activity section of the statement of cash flows adjusts Net Income by adding all non-cash entries related to the firm's operating activities. This includes items such as depreciation, amortization, and changes in accounts receivable and payable. It does not add cash from investors, remove cash used for investment purposes, or subtract all expenses and costs related to operating activities.

Which of the Following Is a Way That the Operating