Noncash revenues and expenses must be included in net cash flow from operating activities when preparing a Statement of Cash Flows using the direct method.

Question

Quizplus · Accepted Answer

In the direct method of preparing a Statement of Cash Flows, only cash receipts and cash payments are reported; noncash revenues and expenses are not included in the calculation of net cash flow from operating activities.

Noncash Revenues and Expenses Must Be Included in Net Cash