Starting with net income and adjusting it for items that affected reported net income but which did not affect cash when calculating operating cash flows is called the

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Quizplus · Accepted Answer

The process described in the question is known as the indirect method of preparing a statement of cash flows. This method starts with net income from the income statement and adjusts for non-cash expenses and gains, as well as changes in working capital accounts, to calculate operating cash flows. The other options listed are not methods of preparing a statement of cash flows.

Starting with Net Income and Adjusting It for Items That