In the operating activities section of the statement of cash flows,we start with net income when using:
A)The direct method.
B)The indirect method.
C)Both the direct and the indirect method.

Question

Quizplus · Accepted Answer

The indirect method starts with net income and adjusts for non-cash items and changes in working capital to arrive at cash flows from operating activities. The direct method, on the other hand, directly shows cash inflows and outflows from operating activities without starting with net income.

In the Operating Activities Section of the Statement of Cash