Which of the following is true concerning the direct method of calculating operating cash flows?
A) does not tie the net income reported on a company's income statement to the net cash provided from operating activities
B) does not show how the changes in the elements of a company's operating cycle affected its operating cash flows
C) reports a company's operating cash inflows separately from its operating cash outflows
D) All of these choices

Question

Quizplus · Accepted Answer

The direct method of calculating operating cash flows does not tie the net income reported on a company's income statement to the net cash provided from operating activities, does show how the changes in the elements of a company's operating cycle affected its operating cash flows, and reports a company's operating cash inflows separately from its operating cash outflows. Therefore, all of the choices are true about the direct method.

Which of the Following Is True Concerning the Direct Method