The two ways to format the operating activities on the statement of cash flows are:
A)direct and indirect methods.
B)direct and operating methods.
C)indirect and net worth methods.
D)direct and net income methods.

Question

Quizplus · Accepted Answer

The two ways to format the operating activities on the statement of cash flows are the direct method and the indirect method. 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 operating cash flows.

The Two Ways to Format the Operating Activities on the Statement