The Statement of Cash Flows Shows the Net Effect of Revenues

question 42

True/False

The statement of cash flows shows the net effect of revenues and expenses for a reporting period.

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Definitions:

Indirect Approach

A method used in cash flow statements where net income is adjusted for non-cash transactions and changes in working capital to calculate operational cash flow.

Investing Activities

Transactions involving the purchase or sale of long-term assets and other investments, part of a company's cash flow analysis.

Investing Activities

Financial activities related to the acquisition or sale of long-term assets and other investments that are not equivalent to cash.

Indirect Method

A cash flow statement preparation approach that adjusts net income for changes in non-cash accounts to compute cash flow from operating activities.