In preparing a statement of cash flows, the ____ method involves adjusting net income to reconcile it to net cash flows from operating activities.
A) direct
B) indirect
C) accrual
D) none of the above

Question

Quizplus · Accepted Answer

The indirect method of preparing a statement of cash flows involves adjusting net income by adding back noncash expenses such as depreciation and amortization, and then reconciling it to net cash flows from operating activities.

In Preparing a Statement of Cash Flows, the ____ Method