Preparing a Cash Flow Statement by the Indirect Method

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question 1 of 3

Which of these do not affect the indirect method of preparing a cash flow statement?

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1. What is the biggest advantage of the indirect method of preparing a cash flow statement?

2. What section of the cash flow statement changes based on whether you use the indirect or direct method of preparation?

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About This Quiz & Worksheet

You can complete this quiz and worksheet when you're ready to measure your understanding of the cash flow indirect method. Some of these questions deal with how this method is used.

Quiz & Worksheet Goals

We designed this quiz to allow you to demonstrate that you can answer questions about:

  • Cash flow statements
  • What affects this method of preparing a cash flow statement
  • The part of a cash flow statement that changes if using a direct or indirect preparation method

Skills Practiced

Use this quiz as an opportunity to practice the following study skills:

  • Reading comprehension - ensure that you draw the most important information from the related lesson on how to prepare a cash flow statement with the indirect method
  • Defining key concepts - ensure that you can accurately define the indirect method of preparing a cash flow statement
  • Knowledge application - use your knowledge to answer a question about advantages to using the indirect method

Additional Learning

The lesson that accompanies this quiz, entitled Preparing a Cash Flow Statement by the Indirect Method, was created to increase what you know about this subject. Access this lesson if you'd like to find out more about:

  • What the indirect method allows accountants to do
  • Where to get the information needed to perform the indirect method
  • The order of information in this method of preparing a cash flow statement
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