On a statement of cash flows prepared using the direct method,if certain expenses do not require a current outlay of cash,those expenses must be subtracted from operating expense to arrive at cash payments for operating expenses.

Question

Quizplus · Accepted Answer

The direct method of preparing the cash flow statement requires the actual cash receipts and cash payments during the period to be reported. Therefore, expenses that do not require a current outlay of cash, such as depreciation or amortization, must be subtracted from operating expenses to arrive at the cash payments for operating expenses.

On a Statement of Cash Flows Prepared Using the Direct