Assume that a statement of cash flows reports increases and decreases in current asset accounts. Which of the following is true?
A)Increases and decreases in current assets are not reported on the statement of cash flows.
B)Increases and decreases in current assets are reported when using both the direct and indirect methods.
C)The statement was prepared using the direct method.
D)The statement was prepared using the indirect method.

Question

Quizplus · Accepted Answer

In the indirect method of preparing the statement of cash flows, changes in current assets and liabilities are adjusted to reconcile net income to net cash provided by operating activities.

Assume That a Statement of Cash Flows Reports Increases and Decreases