When using the spreadsheet (work sheet) for the statement of cash flows, under the indirect method, entries made on the spreadsheet are
A) not recorded in the journal or posted to the ledger
B) recorded in the journal and posted to the ledger
C) recorded in the journal but not posted to the ledger
D) not recorded in to the journal but are posted to the ledger

Question

When using the spreadsheet (work sheet) for the statement of cash flows, under the indirect method, entries made on the spreadsheet are​
A) not recorded in the journal or posted to the ledger
B) recorded in the journal and posted to the ledger
C) recorded in the journal but not posted to the ledger
D) not recorded in to the journal but are posted to the ledger

Quizplus · Accepted Answer

The entries made on the spreadsheet for the statement of cash flows under the indirect method are not recorded in the journal or posted to the ledger. The purpose of the statement of cash flows is to show the cash inflows and outflows of the business during the period, and it does not require journal entries or ledger postings. The information is obtained from the balance sheet, income statement, and other sources such as the bank statement and accounts receivable and payable records.

When Using the Spreadsheet (Work Sheet) for the Statement of Cash