The Indirect Method for Preparation of the Operating Activities Section

Multiple Choice

The indirect method for preparation of the operating activities section of the statement of cash flows involves adjustments:

A) For income statement items involving operating activities that do not affect cash inflows or outflows.
B) For income statement items involving operating activities that do not affect cash inflows or outflows and for changes in noncash current assets and current liabilities.
C) To eliminate gains and losses resulting from investing and financing activities.
D) For changes in noncash current assets and current liabilities.
E) All of these answers are correct.