Question by  TZ16 (367)

How do you prepare a statement of cash flows using the indirect method?


Answer by  worker2592 (117)

to prepare this statement you need to have three categories: Operations activities, Investing Activities, and Financing activities. Each will have subcategories that are sub items of each activity. Such are Cash Receipts, Stocks, and dividends.


Answer by  Siri (81)

Take opening cash balance. Take the Net Income from the Income Statement and add back all the non-cash expenses and deduct all the non-cash revenues to derive to the net cash flow from operating actvities. Next is preparing the Net Cash Flow from Investing & Financing Activities by seeing the difference between the balance sheets of two periods. s


Answer by  Eric6566 (115)

Your starting point is net income. Adjustments for non-cash transactions are made first, then adjustments for cash-based transactions are made. Increases in assets are deducted from net income, increases in liabilities increase net income.

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