The reporting format for the statement of cash flows which shows the difference between accrual-based net income and cash flows from operations is the:

Question

Quizplus · Accepted Answer

The reporting format for the statement of cash flows which shows the difference between accrual-based net income and cash flows from operations is the indirect format. This format adjusts net income for non-cash items and changes in current assets and liabilities to arrive at cash flows from operating activities. The direct format shows actual cash inflows and outflows, but does not reconcile to net income. The noncash and allowance formats do not relate specifically to the presentation of cash flows from operations.

The Reporting Format for the Statement of Cash Flows Which