The statement of cash flows usually presents cash flow from operations in the _____ format, beginning with net income for the period.The statement then adjusts for revenues not providing cash, for expenses not using cash, and for changes in working capital accounts.
A)funds flow
B)direct
C)indirect
D)profit and loss
E)working capital

Question

Quizplus · Accepted Answer

The statement of cash flows usually presents cash flow from operations in the indirect format, which starts with net income for the period, and then adjusts for non-cash revenue and expenses and changes in working capital accounts. The funds flow statement is a different type of financial statement that shows changes in a company's long-term funds, while the direct and profit and loss formats do not provide the necessary adjustments. Working capital is a relevant concept to the statement of cash flows, but it is not a format.

The Statement of Cash Flows Usually Presents Cash Flow from Operations