Direct method of preparing a statement of cash flows is described as which of the following?

Direct method of preparing a statement of cash flows is described as which of the following?

• A. It reconciles net income to net cash provided by operating activities
• B. It reports cash flows from operating activities into categories, such as cash paid to suppliers and cash received from customers
• C. It reconciles net cash flow to earnings
• D. It only reports financing activities

Answer: (B)