A calculation of the net cash provided or used by operating activities that lists the major classes of operating cash receipts,such as receipts from customers,and subtracts the major classes of operating cash disbursements,such as cash paid for merchandise,is the
A)Cash basis of accounting
B)Direct method of calculating net cash provided (or used)by operating activities
C)Classified statement of cash flows
D)Indirect method of calculating net cash provided (or used)by operating activities
E)Net method of recording cash flows from operating activities

Question

Quizplus · Accepted Answer

The direct method of calculating net cash provided or used by operating activities involves listing the major classes of operating cash receipts and subtracting the major classes of operating cash disbursements. This method provides a more detailed and transparent view of the company's operating cash flows compared to the indirect method. A classified statement of cash flows is a presentation of the cash flow statement that separates operating, investing, and financing activities. The cash basis of accounting is a method of recording transactions when cash is received or paid. The net method of recording cash flows is a method of accounting for cash discounts received or paid.

A Calculation of the Net Cash Provided or Used by Operating