The first line item in the operating activities section of a spreadsheet 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)Net income (loss).
E)Adjustments to net income.

Question

Quizplus · Accepted Answer

The first line item in the operating activities section when using the indirect method is net income (loss) because all adjustments to reconcile net income (loss) to cash flows from operating activities are made from this starting point.

The First Line Item in the Operating Activities Section of a Spreadsheet