Which of the following statements is true about the indirect method of preparing the operating activities section on a statement of cash flows?

Question

Quizplus · Accepted Answer

The indirect method of preparing the operating activities section on a statement of cash flows adjusts accrual basis net income to cash provided by operating activities by adding back non-cash expenses (such as depreciation) and adjusting for changes in current assets and liabilities (such as accounts receivable and accounts payable). It does not adjust cash basis net income or budgeted net income.

Which of the Following Statements Is True About the Indirect