The direct method of reporting
A)is preferred by U.S.GAAP.
B)shows a reconciliation between net income and cash flow from operations either at the bottom of the statement of cash flows or in a separate note.
C)reports the amounts of cash received from customers less cash disbursed to various suppliers, employees, lenders for interest payments, and taxing authorities.
D)includes all of the above.
E)includes none of the above.

Question

Quizplus · Accepted Answer

The direct method of reporting cash flows is preferred by U.S. GAAP, requires a reconciliation between net income and cash flow from operations, and involves reporting cash transactions such as cash received from customers and cash paid to suppliers and employees.

The Direct Method of Reporting