Cash flows provided (used) by operating activities, prepared using the indirect method, would include
A)receipts from the sale of investments.
B)net income.
C)payments for dividends.
D)receipts from the issue of preferred shares.

Question

Quizplus · Accepted Answer

Net income is the starting point for calculating cash flows from operating activities using the indirect method. It adjusts for non-cash items and changes in working capital to determine cash provided by or used in operations. Receipts from the sale of investments, payments for dividends, and receipts from the issue of preferred shares are related to investing and financing activities, not operating activities.

Cash Flows Provided (Used) by Operating Activities, Prepared Using the Indirect