Under the direct method of reporting operating cash flows, a company deducts its operating cash outflows from its operating cash inflows to determine its net cash provided by or used) in operating activities.

Question

Quizplus · Accepted Answer

Under the direct method, a company lists all the major operating cash receipts (like cash received from customers) and deducts the major operating cash payments (like cash paid for inventory) to calculate the net cash provided by (or used in) operating activities.

Under the Direct Method of Reporting Operating Cash Flows, a Company