Which of the following statements is true?
A)The indirect method and the direct method will produce a different amount of net cash flow from investing activities.
B)The indirect method starts with net income and adjusts it to cash provided by (used for)operating activities.
C)The direct and indirect methods include different types of cash flows in the investing activities section.
D)The indirect method includes all non-cash activities,whereas the direct method includes only the cash activities.

Question

Quizplus · Accepted Answer

The indirect method starts with net income and adjusts it to cash provided by (used for) operating activities, while the direct method reports actual cash receipts and cash payments from operating activities. The other statements are false; the indirect and direct methods will produce the same amount of net cash flow from investing activities, both methods include the same types of cash flows in the investing activities section, and the indirect method includes both cash and non-cash activities.

Which of the Following Statements Is True