The Indirect Method of Reporting Cash Flows from Operating Activities

question 99

True/False

The indirect method of reporting cash flows from operating activities begins with net income from the income statement.

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Definitions:

Uniform Commercial Code Article 3

A section of the Uniform Commercial Code that governs negotiable instruments, such as checks and promissory notes.

UCC Article 4

A portion of the Uniform Commercial Code that governs bank deposits and collections.

Negotiable Instrument

An official paper that commits to paying a designated sum, either immediately upon request or at a predetermined date, clearly identifying the individual who will make the payment.

Drawer's Signature

is the signature of the person who has written and is responsible for the financial instrument, such as a check, authorizing its use and the payment it represents.