The _____ method begins with net income for a period and then shows adjustments to net income to convert revenues to cash received from customers and to convert expenses to cash disbursed to various suppliers of goods and services.Most companies use this method.
A)direct
B)indirect
C)adjustment
D)income
E)free cash

Question

Quizplus · Accepted Answer

The method being described here is the indirect method of preparing the statement of cash flows. This method adjusts net income by adding back non-cash expenses and adjusting for changes in working capital accounts to arrive at the cash flows from operating activities.

The _____ Method Begins with Net Income for a Period