The application of the indirect method requires an analysis of:
A) balance sheet accounts and the gains/losses on dispositions
B) income statement accounts
C) all accounts in the general ledger
D) only current asset and current liability accounts

Question

Quizplus · Accepted Answer

The indirect method for cash flow statement preparation involves adjustments to net income to convert it from the accrual basis to the cash basis of accounting. This requires analyzing changes in balance sheet accounts, including the effects of gains and losses on dispositions, to determine their cash impact.

The Application of the Indirect Method Requires an Analysis Of