Kizspy | Question: 36
(Choose 1 answer)
In indirect method, the net income figure from the income statement is used to calculate the amount of net
cash flow from operating activities because:
A. the income statement is prepared on accrual basis in which revenue is recognized when earned and not
when received
B. the income statement is prepared on cash basis in which revenue is recognized when earned and not
when received
C. the cash flow statement is prepared on accrual basis in which revenue is recognized when earned and not
when received
D. the cash flow statement is prepared on cash basis in which revenue is recognized when earned and not
when received
