In computing net cash flow from operating activities using the direct method, each item in the income statement is adjusted from the accrual basis to the cash basis.

Question

Quizplus · Accepted Answer

The direct method of computing net cash flow from operating activities involves adjusting each item in the income statement from the accrual basis to the cash basis. This is done to determine the actual cash inflows and outflows associated with the operating activities of the business.

In Computing Net Cash Flow from Operating Activities Using the Direct