Which of the following is not true with regard to the preparation of a cash flow statement?
A) Cash flows are categorized by operating, investing, and financing activities.
B) The changes in all income statement accounts are calculated and then listed as cash inflows or outflows.
C) The direct method or the indirect method may be used to prepare the statement of cash flows.
D) The changes in all of the balance sheet accounts are calculated and then listed as inflows or outflows, except for cash.

Question

Quizplus · Accepted Answer

The changes in all income statement accounts are not calculated and listed as cash inflows or outflows. Only certain income statement line items, such as depreciation, amortization, and gains or losses on the sale of long-term assets, are adjusted for the purpose of calculating cash flows.

Which of the Following Is Not True with Regard to the Preparation