When preparing a statement of cash flows using the direct method, a net loss reported on the income statement will

Question

Quizplus · Accepted Answer

The direct method of preparing a statement of cash flows focuses on the major classes of gross cash receipts and payments. A net loss from the income statement does not directly appear in the cash flow statement under the direct method; instead, the effects of transactions that caused the net loss are reflected in the cash flows from operating, investing, or financing activities based on the nature of each transaction.

When Preparing a Statement of Cash Flows Using the Direct