A reconciliation of net income to net cash flow from operating activities for the indirect method does NOT include:
A) balance sheet accounts
B) revenue and expense accounts
C) contra accounts
D) asset accounts

Question

Quizplus · Accepted Answer

The indirect method for calculating cash flow from operating activities starts with net income and then adjusts for changes in balance sheet accounts that affect cash. It does not directly adjust for revenue and expense accounts since these have already been accounted for in the calculation of net income.

A Reconciliation of Net Income to Net Cash Flow from Operating