Asked by Justin Robles on May 04, 2024
Verified
The direct method of preparing the operating activities section of the statement of cash flows reports major classes of cash receipts and cash payments related to the day-to-day operations of the business.
Operating Activities
Activities directly related to the day-to-day operations of a business, such as selling products or services, which are reflected in the company's cash flow from operating activities.
Direct Method
A cash flow statement preparation method that lists specific operating cash receipts and payments, directly showing sources and uses of cash.
- Understand the distinction between direct and indirect reporting techniques for cash flows from operating activities.
Verified Answer
GB
Girlie BalingbingMay 09, 2024
Final Answer :
True
Explanation :
The direct method of preparing the operating activities section of the statement of cash flows reports major classes of cash receipts and cash payments related to the day-to-day operations of the business, making it a true statement.
Learning Objectives
- Understand the distinction between direct and indirect reporting techniques for cash flows from operating activities.