Preparing a statement of cash flows under the INDIRECT method involves all of the following EXCEPT determining the
A) cash provided by operations.
B) cash provided by or used in investing and financing activities.
C) change in cash during the period.
D) cash collections from customers during the period.

Question

Quizplus · Accepted Answer

Preparing a statement of cash flows under the indirect method involves determining the cash provided by operations, the cash provided by or used in investing and financing activities, and the change in cash during the period. However, it does not involve determining cash collections from customers during the period because the indirect method starts with net income, which is calculated using accrual accounting, rather than with cash collections and cash payments.

Preparing a Statement of Cash Flows Under the INDIRECT Method