The direct method of presenting net cash flow from operating activities:
A) Must be used in a statement of cash flows
B) Reconciles accrual basis net income to a cash basis amount
C) Shows the major categories of operating cash receipts and cash payments
D) Is used when there are no cash flows from investing and financing activities

Question

Quizplus · Accepted Answer

Cash received from customers, cash paid for inventory, cash paid for interest, cash paid for income taxes, and cash paid for operating expenses are the major cash flows reporting under the direct method in the operating activities section.

The Direct Method of Presenting Net Cash Flow from Operating