Which of the following would appear on a cash flow statement prepared using the direct method?
A)Increase/decrease in current assets
B)Adjustments to profit
C)Adjustments for gains and losses on sale of property
D)Cash payments for salaries

Question

Quizplus · Accepted Answer

The direct method of preparing a cash flow statement presents actual cash inflows and outflows from operating activities. Cash payments for salaries is a direct cash outflow that would appear on this type of statement. A) Increase/decrease in current assets is an indirect adjustment made to reconcile net income to cash flows from operating activities. B) Adjustments to profit and C) Adjustments for gains and losses on sale of property are also indirect adjustments made to reconcile net income to cash flows from operating activities.

Which of the Following Would Appear on a Cash Flow