The first line item in the operating activities section of a spreadsheet for a statement of cash flows prepared using the indirect method is:
A) Net income (loss).
B) Adjustments to net income.
C) Cash received from customers.
D) Cash.
E) Increase (decrease) in accounts receivable.

Question

Quizplus · Accepted Answer

The indirect method starts with net income (loss) and adjusts for changes in balance sheet accounts to convert it to cash flow from operating activities.

The First Line Item in the Operating Activities Section of a Spreadsheet