The first item reported in the operating activities section for a statement of cash flows prepared according to the indirect method is:
A) Cash.
B) Net income.
C) Increase decrease) in accounts receivable.
D) Cash received from customers.
E) Adjustments to net income.

Question

Quizplus · Accepted Answer

The indirect method starts with net income and adjusts for changes in balance sheet accounts to convert it to cash flow from operating activities.

The First Item Reported in the Operating Activities Section for a Statement