Asked by

Austin Busold
on Nov 15, 2024

verifed

Verified

The method of reporting cash flows from operating activities under which revenues and expenses on the income statement are adjusted to reflect the amount of cash received or expended for each item is the:

A) direct method.
B) indirect method.
C) combination method.
D) adjustment method.

Direct Method

A way of preparing the cash flow statement where actual cash flow information from operating activities is used instead of adjustments to net income.

Revenues

income that a business receives from its normal business activities, usually from the sale of goods and services to customers.

Operating Activities

Transactions and events that affect the net income of a business, related to its principal revenue-producing activities.

  • Comprehending the distinction and utilization of direct and indirect approaches in the cash flow statement, specifically within operating activities.
  • Computation of cash inflows and outflows associated with operational activities through direct and indirect approaches.
verifed

Verified Answer

MP
Melvin PerryNov 16, 2024
Final Answer:
Get Full Answer