Answer :
It is true that using the indirect technique, net income from an organization's income statement is first subtracted to determine cash flow from operating operations.
Revenue is only recorded when it is earned, not when it is received, because a company's income statement is constructed on an accrual basis.
While using the indirect technique, the differences from non-cash transactions are added to or subtracted from net income before calculating cash flow. Non-cash items can be seen in the shifts in a company's assets and liabilities from one period to the next one on its balance sheet.
In order to determine the amount of cash created by operating the operations, the indirect method for preparing the statement of cash flows entails adjusting net income with changes in balance sheet accounts.
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