Question

in developing the cash flows from operating activities most companies in the United States do what

Answer 1

SOLUTION

COMPANIES IN USA PREPARE CASH FROM OPERATION ACTIVITIES BY APPLYING INDIRECT METHOD .

THEY TAKE NET INCOME FROM INCOME STATEMENT ADD ALL NON CASH EXPENSES LIKE DEPRECIATION , loss on sale of assets etc .AND SUBSTRACT NON OPERTING INCOMES .

There after increase in current liabilities and decrease in current assets shall be added and decrease in current liabilities and increase in current assets shall be substracted and net resultant shall be cash from operating activities .

Details	$
CASH FROM OPERATING ACTIVITIES NET INCOME ADD : NON CASH EXPENSES LIKE DEPRECIATION ETC LESS NON OPERTING INCOMES ADD INCREASEY IN CURREN LIABILITIES DECREASE IN CURRENT ASSETS LESS DECREASE IN CURRENT LIABILITIES INCREASE IN CURRENT ASSETS CASH FROM OPEEATING ACTIVITIES