The indirect method of preparing the statement of cash flows
A)is seldom used by companies because of the extra effort required to gather cash flow information.
B)calculates only the cash effect of each operating activity.
C)is the method preferred by the FASB.
D)begins with net income,adds back non cash expenses,and adjusts for changes in the current asset and current liability accounts.
E)can be used to determine cash flows from operating,investing,and financing activities.

Question

Quizplus · Accepted Answer

The indirect method of preparing the statement of cash flows begins with net income, adds back non-cash expenses, and adjusts for changes in the current asset and current liability accounts. It is a commonly used method to determine cash flows from operating activities.

The Indirect Method of Preparing the Statement of Cash Flows