Which method is used by the majority of U.S.companies to report cash flows from operating activities?
A) Accrual method
B) Direct method
C) Indirect method
D) Computational method

Question

Quizplus · Accepted Answer

The majority of U.S. companies use the indirect method to report cash flows from operating activities in their statement of cash flows. This method begins with net income and adjusts it for non-cash transactions and changes in current assets and liabilities to arrive at the cash flows from operating activities. The direct method is also an option, but it is less commonly used as it requires more detailed information and is more time-consuming to prepare. The accrual and computational methods are not commonly used for reporting cash flows from operating activities.

Which Method Is Used by the Majority of U