Under the direct method of cash flow, which of the following is not included in the statement of cash flows?
A)Changes in accounts receivable
B)Changes in accounts payable
C)Changes in inventories
D)Changes in amortization

Question

Quizplus · Accepted Answer

Changes in amortization are not included in the direct method of cash flow since it is a non-cash item that is included in the net income calculation. The direct method focuses on cash receipts and payments during the period. Changes in accounts receivable, accounts payable, and inventories are all included in the direct method of cash flow as they represent changes in cash flows related to operating activities.

Under the Direct Method of Cash Flow, Which of the Following