Question

The first step in the preparation of the statement of cash flows is to determine the net cash flow from operating activities

A)True
B)False

Answer 1

True. The first step in the preparation of the statement of cash flows is to determine the net cash flow from operating activities. This step helps analyze the cash-generating ability of a company's core operations.

Step-by-step explanation:

The first step in the preparation of the statement of cash flows is to determine the net cash flow from operating activities. This statement shows the cash generated or used by a company's core operations. It starts with net income and then adjusts for non-cash expenses and changes in working capital accounts. By determining the net cash flow from operating activities, you can analyze the cash-generating ability of a company's core operations.