Starting with profit and adjusting it for items that affected reported profit but which did NOT affect cash is called the
A) direct method.
B) indirect method.
C) allocation method.
D) cost-benefit method.

Question

Quizplus · Accepted Answer

The indirect method starts with net income and adjusts for non-cash transactions and changes in working capital to arrive at cash flow from operating activities.

Starting with Profit and Adjusting It for Items That Affected