If the direct method is used to report cash flows from operating activities in the body of the statement of cash flows, a reconciliation of net income to net cash flows from operating activities also is required. True or False

Question

Hensley

Business

22 February, 14:27

If the direct method is used to report cash flows from operating activities in the body of the statement of cash flows, a reconciliation of net income to net cash flows from operating activities also is required. True or False

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Belinda Suarez · Answer 1

True

Explanation:

"If the direct method is used to report cash flows from operating activities in the body of the statement of cash flows, a reconciliation of net income to net cash flows from operating activities also is required" is a true statement.

In the field of finance, a report of cash flow is a statement that has the entire information related to the cash flow. It consists of all the data related to the inflow and outflow of cash and reports the analysis of how the financial activities have effected the overall balance of the statement and what needs to be done in the future.