Question

question content areaunder the indirect method, the first line in the operating activities section of the statement of cash flows is the net income or loss for the period. true

Answer 1

Under the indirect method, the first line in the operating activities section of the statement of cash flow is the net income or net loss for the period, it is a true statement.

Cash-related net income activities are included in operating activities. For instance, because revenues and expenses are included in net income, operating activities include cash gained from the sale of goods (revenue) and cash spent on goods (expense). Cash that is produced by a company's regular operating procedures is known as operating cash flow. Investors place a high value on a company's capacity to continually produce positive cash flows from its ongoing activities. The true profitability of a corporation can be discovered, especially through operating cash flow. One of the most accurate ways to measure the sources and uses of money.

A cash flow statement is created to show the sources and uses of a company's cash over a specific time period. Although the cash flow statement is typically regarded as being less significant than the income statement and the balance sheet, it can be utilized to comprehend performance trends that aren't apparent from the other two financial statements.

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