What method starts with the total for net income and adjusts for expenses and revenues not using or producing cash, then removes the effects of nonoperating gains and losses or any balance sheet changes involving non-cash operating accounts?
A)direct method for calculating the cash flows from investing.
B)indirect method for calculating the cash flows from investing.
C)indirect method for calculating the cash flows from financing.
D)direct method for calculating the cash flows from operations.
E)indirect method for calculating the cash flows from operations.

Question

Quizplus · Accepted Answer

The method described in the question is the indirect method for calculating the cash flows from operations. This method starts with net income and adjusts for non-cash expenses and revenues, as well as changes in operating balance sheet accounts. It also removes the effects of non-operating gains/losses.

What Method Starts with the Total for Net Income and Adjusts