Asked by
Patrisha Ivy Balagso
on Oct 15, 2024
Verified
When preparing the operating activities section of the statement of cash flows using the direct method,expenses and losses with no cash outflows are added back to net income.
Direct Method
A cash flow statement preparation approach that itemizes actual cash inflows and outflows from operating activities, as opposed to estimating them through indirect adjustments.
Expenses and Losses
Costs incurred in the operation of a business (expenses) and decreases in value not directly related to operations (losses).
- Become familiar with the contrasts between the direct and indirect techniques of documenting cash flows from operating activities.
Verified Answer
DB
Learning Objectives
- Become familiar with the contrasts between the direct and indirect techniques of documenting cash flows from operating activities.
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