Reference no: EM132480776

Question 1: Which of the following statements about the indirect method of presenting cash flow from operations is not true?

Select one:

a. The direct and indirect methods give the same cash flow from operations.

b. Depreciation expense is added back to operating profit in the indirect method.

c. Australian companies do not need to report information about the indirect method.

d. Decreases in accounts payable are deducted from operating profit in the indirect method.

e. None of the options

Question 2: Company ZYA Ltd uses the indirect method to calculate cash flows from operations. Which of the following items would NOT added back to Net Profit After Tax to obtain cash flow from operations using the indirect method?

Select one:

a. decrease in accounts receivable

b. loss on sale of equipment

c. gain on sale of investment

d. depreciation

e. increase in accounts payable