The reporting of net cash provided or used by operating activities that lists the major items of operating cash receipts, such as receipts from customers, and subtracts the major items of operating cash disbursements, such as cash paid for merchandise, is referred to as the:
A) Direct method of reporting net cash provided or used by operating activities.
B) Indirect method of reporting net cash provided or used by operating activities.
C) Classified statement of cash flows.
D) Cash basis of accounting.
E) Net method of reporting cash flows from operating activities.

Question

Quizplus · Accepted Answer

The direct method of reporting net cash provided or used by operating activities lists the major items of operating cash receipts and subtracts the major items of operating cash disbursements. This method provides a more detailed and transparent view of a company's operating cash flows compared to the indirect method.

The Reporting of Net Cash Provided or Used by Operating