The two approaches of reporting cash flows provided by operating activities are the
A)direct and indirect methods.
B)basic and standard methods.
C)gross margin and contribution margin methods.
D)liquidity and profitability methods.

Question

Quizplus · Accepted Answer

The two approaches of reporting cash flows provided by operating activities are the direct and indirect methods. The direct method reports actual cash inflows and outflows from operating activities, while the indirect method adjusts net income for non-cash items and changes in current assets and liabilities to arrive at cash flows from operating activities.

The Two Approaches of Reporting Cash Flows Provided by Operating