The first item reported in the operating activities section for a statement of cash flows prepared according to the indirect method is:
A) Cash.
B) Cash received from customers.
C) Increase (decrease)in accounts receivable.
D) Net income.
E) Adjustments to net incomE.

Question

Quizplus · Accepted Answer

The first item reported in the operating activities section using the indirect method is net income. This is because the indirect method begins with net income and then makes adjustments to convert the accrual basis net income to the cash basis net income.

The First Item Reported in the Operating Activities Section for a Statement