Under the direct method of reporting cash flows, net income is adjusted for transactions impacting both net income and cash flows, but in different ways.

Name: Under the direct method of reporting cash flows, net income is adjusted for transactions impacting both net income and cash flows, but in different ways.
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Question

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The direct method of reporting cash flows involves listing actual cash receipts and payments, not adjusting net income. The indirect method adjusts net income for non-cash transactions.

Under the Direct Method of Reporting Cash Flows, Net Income