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the indirect method starts with net income and converts it to net cash provided (used) by
operating activities. This means that
A)the indirect method starts with net income and adds back with all expenses relating to
operating activities
B)the indirect method adjusts net income for contra account balances
C)the indirect method calculates net income as the difference between net assets and net
liabilities
D)the indirect method adjusts net income for items that affected reported net income but did not
affect cash

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  • 1. the indirect method starts with net income and converts it to net cash provided (used) by operating activities. This means that A)the indirect method starts with net income and adds back with all expenses relating to operating activities B)the indirect method adjusts net income for contra account balances C)the indirect method calculates net income as the difference between net assets and net liabilities D)the indirect method adjusts net income for items that affected reported net income but did not affect cash