The net cash provided by operating activities is calculated in the same way,whether the company uses the direct or the indirect method of preparing the statement of cash flows.

Question

Quizplus · Accepted Answer

The direct method lists all cash receipts and payments from operating activities, while the indirect method starts with net income and adjusts for non-cash transactions and changes in working capital to arrive at the net cash provided by operating activities.

The Net Cash Provided by Operating Activities Is Calculated in the Same