When net cash from operating activities is presented by the direct method, the statement of cash flows is accompanied by a supplementary schedule reconciling:
A) Net cash from operating activities with net sales.
B) Profit for the year with the net increase or decrease in cash and cash equivalents.
C) Profit for the year with net cash from operating activities.
D) Net cash from operating activities shown in the statement with that which would result from use of the indirect method.

Question

Quizplus · Accepted Answer

The direct method requires a reconciliation of profit for the year with net cash from operating activities, showing adjustments for non-cash items and changes in working capital.

When Net Cash from Operating Activities Is Presented by the Direct