When using the indirect method to prepare the statement of cash flows,the financing activities section begins with net income,followed by several adjustments to net income.

Question

Quizplus · Accepted Answer

The financing activities section in the statement of cash flows prepared using the indirect method begins with the net cash provided or used by operating activities, not net income. Net income is used as the starting point for preparing the operating activities section.

When Using the Indirect Method to Prepare the Statement of Cash