The preparation of the statement of cash flows using the indirect method involves the conversion from the accrual basis to the cash basis.

Question

Quizplus · Accepted Answer

The indirect method for preparing the statement of cash flows starts with net income from the accrual basis income statement and then makes adjustments to convert it to the cash basis. This process involves analyzing changes in current assets and liabilities to determine the actual cash inflows and outflows during a period.

The Preparation of the Statement of Cash Flows Using the Indirect