6. The net cash flow from operations must be reported using the direct method. 7.The direct method is generally favored by analysts and other users of cash flow statements. 8. Noncash items, such as depreciation expense, must be added to net income to arrive at net cash provided by (used in) operating activities when the indirect method is used.
6. The net cash flow from operations must be reported using the direct method. 7.The direct method is generally favored by analysts and other users of cash flow statements. 8. Noncash items, such as depreciation expense, must be added to net income to arrive at net cash provided by (used in) operating activities when the indirect method is used.
Financial Accounting Intro Concepts Meth/Uses
14th Edition
ISBN:9781285595047
Author:Weil
Publisher:Weil
Chapter6: Statement Of Cash Flows
Section: Chapter Questions
Problem 5Q
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Transcribed Image Text:True or False
6. The net cash flow from operations must be reported using the direct method.
7.The direct method is generally favored by analysts and other users of cash flow statements.
8. Noncash items, such as depreciation expense, must be added to net income to arrive at net
cash provided by (used in) operating activities when the indirect method is used.
9. When using the indirect method, losses are subtracted from net income in computing cash
flow from operations.
10. The indirect method of reporting net cash flow from operations shows the operating cash
receipts and cash payments.
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