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

Question

Quizplus · Accepted Answer

The first line item in the operating activities section of a statement of cash flows prepared using the indirect method is typically net income. This is because the indirect method starts with net income and then adjusts for non-cash transactions and changes in working capital to arrive at cash provided by operating activities.

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