Firms typically report cash flows from operations using the
A)direct method.
B)indirect method.
C)financial position method.
D)variable method.
E)funds flow method.

Question

Quizplus · Accepted Answer

The majority of firms use the indirect method to report cash flows from operations in their statement of cash flows. This method starts with net income and adjusts for non-cash items and changes in working capital to arrive at the operating cash flows. The direct method is an alternative approach that involves reporting actual cash inflows and outflows from operating activities. The other options listed are not commonly used methods for reporting cash flows from operations.

Firms Typically Report Cash Flows from Operations Using the