Question

"The direct method for preparing and reporting the statement of cash flows reports net income and then adjusts it for items necessary to calculate net cash provided or used by operating activities"

A. True
B. False

Answer 1

Answer:

The correct option is A

Explanation:

The direct method is one of 2 accounting treatments used in preparing cash flow statement. The statemnet of cash flows direct method uses actual cash inflows and ouflows from a company's operations instead of modifying the operating section from accural accounting to a cash basis.