💼 Pre-MBA Exam Prep

A cash flow statement prepared using the indirect method starts with:

A Cash received from customers
B Net income, then adjusts for non-cash items and changes in working capital
C Total revenue
D Cash at beginning of period

✓ Correct Answer: Option B

Indirect method (most common): starts with net income, adds back non-cash charges (depreciation, amortization), adjusts for changes in working capital (ΔAR, ΔAP, ΔInventory).

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