Which of the following statement concerning the statement of cash flows is true?
A) The statement of cash flows is usually more accurate when using the indirect method.
B) If the direct method is used, a supplementary schedule reconciling the net income to net cash from operating activities must still be provided.
C) The statement of cash flows reflects both earnings per share and cash per share.
D) The statement of cash flows is an optional financial statement for an SEC registered firm.

Question

Quizplus · Accepted Answer

If the direct method is used, a supplementary schedule reconciling the net income to net cash from operating activities must still be provided. The statement of cash flows is required for all SEC registered firms, and it reflects only cash inflows and outflows, not earnings per share. The accuracy of the statement of cash flows is dependent on the method used and the quality of the underlying data, and both the direct and indirect methods have their advantages and disadvantages.

Which of the Following Statement Concerning the Statement of Cash