Asked by Jacob Altizer on Jun 07, 2024
Verified
Using the indirect approach noncash charges in the income statement are ______________ to net income and noncash credits are ______________ to compute cash provided by operations.
Indirect Approach
A method used in cash flow statements where net income is adjusted for non-cash transactions and changes in working capital to calculate cash flow from operating activities.
Noncash Charges
Expenses reported on an income statement that do not involve actual cash flow, such as depreciation, amortization, and stock-based compensation.
Noncash Credits
Transactions that increase a company's assets or decrease liabilities without the direct movement of cash.
- Understand the adjustments needed to reconcile net income with net cash provided by operating activities.
Verified Answer
Learning Objectives
- Understand the adjustments needed to reconcile net income with net cash provided by operating activities.
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