Question

when using the indirect method to prepare the operating activities section of the statement of cash flows, how is an increase in noncash current assets handled?

Answer 1

It is subtracted from net income in the cash flows from operating activities section.

What is Cash flow statement?

The influx and outflow of a company's cash and cash equivalents are shown in the cash flow statement (CFS), a financial report (CCE). The CFS measures how successfully a company generates cash to pay its debts and fund its operating expenses, or how well it manages its cash position. The CFS is one of the three primary financial statements, with the balance sheet and the income statement being the other two. In this article, we'll describe the CFS's framework and how it may be used to analyze companies. The majority of the CFS is made up of three types of cash, including proceeds from operating, investing, and financing activities.

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