130. Which of the following statements 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 external reporting purposes.

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. This is required because the direct method does not provide enough detail on the sources and uses of cash. Choices A, C, and D are incorrect.