which of the following is disclosed separately in a statement of cash flows using the indirect method?
which of the following is disclosed separately in a statement of cash flows using the indirect method?
Answer: In a statement of cash flows prepared using the indirect method, the following items are typically disclosed separately:
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Operating Activities:
- Net income (or loss)
- Adjustments for non-cash items (e.g., depreciation, amortization)
- Changes in working capital accounts (e.g., changes in accounts receivable, accounts payable)
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Investing Activities:
- Cash flows from the purchase or sale of long-term assets (e.g., property, plant, equipment)
- Cash flows from the purchase or sale of investments (e.g., stocks, bonds)
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Financing Activities:
- Cash flows from borrowing or repaying debt (e.g., loans, bonds)
- Cash flows from issuing or repurchasing stock (e.g., issuing new shares, buying back shares)
These categories help provide a clear breakdown of how cash is generated and used by a company in its operations, investments, and financing activities. Each category is typically presented separately to give stakeholders a better understanding of the company’s cash flow dynamics.