The indirect method for the preparation of the statement of cash flows starts ________.
A)with net income and makes adjustments for all the items that are not cash
B)by converting every number on the income statement to its cash amount
C)by estimating the sources of cash and the uses of cash
D)with cash collected from customers

Question

Quizplus · Accepted Answer

The indirect method for the preparation of the statement of cash flows starts with net income and makes adjustments for all the items that are not cash, such as depreciation and changes in current assets and liabilities.

The Indirect Method for the Preparation of the Statement of Cash