The first section of the statement of cash flows derives cash flow from operations.Both U.S.GAAP and IFRS permit firms to report cash flow from operations using the __________.
A)direct method, only
B)indirect method, only
C)direct and indirect methods
D)adjustment method, only
E)income method, only

Question

Quizplus · Accepted Answer

Both U.S.GAAP and IFRS permit firms to report cash flow from operations using both direct and indirect methods. The direct method shows the actual cash receipts and cash payments during the period, while the indirect method starts with net income and adjusts for non-cash items to derive cash flow from operations.

The First Section of the Statement of Cash Flows Derives