Question

Under the indirect method, the reconciliation of net income to operating cash flows Select one: a....

Under the indirect method, the reconciliation of net income to operating cash flows

Select one:

a. Is required on the face of the statement of cash flows.

b. Is required as a separate schedule.

c. Is not required, but is highly encouraged for inclusion on the face of the statement of cash flows.

d. Is required on the face of the statement of cash flows or as a separate schedule.

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Homework Answers

Answer #1

The Answer is A. Is required on the face of the statement of cash flows.

Explanation:

1) Indirect method of cash flow statement starts with net income and reconciliation of it to operating cash flows is necessary to arrive at total cash flow from operating activity.

2) As cash flow statement starts with net income, it is a face of the statement.

3) Option B is not correct because reconciliation of net income should be done on the face but not as a separate schedule.

4) Option C is not correct because reconciliation of net income is required.

5) Option D is not correct because reconciliation of net income is required only on the face of the statement of cash flow but not as separate schedule.

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