Asked by sophia dudich on Jul 22, 2024
Verified
Explain how the cash flows from operating activities section of the statement of cash flows is prepared using the indirect method.
Indirect Method
A financial accounting technique used to prepare the cash flow statement, where changes in balance sheet items are adjusted to convert accrual-based net income into cash flow.
Operating Activities
Encompasses the revenue-generating activities of a business, including production, sales, and delivery of the company's product, as well as day-to-day operations.
Statement Of Cash Flows
A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, dividing cash flows related to operating, investing, and financing activities.
- Assess the activities contributing to the generation of cash flow from operations.
Verified Answer
Learning Objectives
- Assess the activities contributing to the generation of cash flow from operations.
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