In addition to cash flows that occurred during the period, which of the following amounts listed below appear on the statement of cash flows prepared using the direct method?
I.Beginning balance of cash and cash equivalents
II.Ending balance of cash and cash equivalents
III.Net income

Question

Quizplus · Accepted Answer

The direct method of preparing a statement of cash flows only includes actual cash inflows and outflows that occurred during the period. Therefore, the beginning and ending balances of cash and cash equivalents are included. Net income is only used to reconcile the changes in cash balances, and is not included as a separate line item in the direct method statement.

In Addition to Cash Flows That Occurred During the Period