Under the direct method of cash flow to prepare the statement of cash flows, which of the following is not included in the statement of cash flows?
A)Changes in accounts receivable
B)Changes in depreciation
C)Changes in accounts payable
D)Changes in interest expense

Question

Quizplus · Accepted Answer

The direct method of cash flow focuses on cash inflows and outflows from operating activities, therefore changes in depreciation, which is a non-cash expense, is not included in the statement of cash flows. Changes in accounts receivable, accounts payable, and interest expense are included in the statement of cash flows.

Under the Direct Method of Cash Flow to Prepare the Statement