Which statement is true with respect to the preparation of the 'cash flows from operating activities' section of the statement of cash flows?

Question

Quizplus · Accepted Answer

The preparation of the 'cash flows from operating activities' section of the statement of cash flows can be done using either the direct or indirect method. Option A is incorrect because cash flows from operating activities are based on actual cash receipts and payments, not accrual accounting. Option B is incorrect because operating cash flows are derived from cash receipts and payments related to operating activities, not revenues and expenses. Option D is incorrect because cash payments for depreciation are classified as non-cash transactions and are reported in the investing activities section.

Which Statement Is True with Respect to the Preparation of the 'Cash