Asked by Cassie Trucchio on May 04, 2024
Verified
The indirect and direct methods of preparing the statement of cash flows are identical except for the
A) significant noncash activity section.
B) operating activities section.
C) investing activities section.
D) financing activities section.
Direct Method
A way of reporting cash flows from operating activities by listing major classes of gross cash receipts and payments.
Indirect Method
A way of reporting cash flows from operating activities by starting with net income and adjusting for items that affected reported net income but didn't involve actual cash flows.
Operating Activities
Activities directly related to the day-to-day business operations, including cash flows from selling products or providing services.
- Learn the differences and likenesses when reporting cash flows from operating activities through direct and indirect strategies.
Verified Answer
Learning Objectives
- Learn the differences and likenesses when reporting cash flows from operating activities through direct and indirect strategies.
Related questions
In Preparing the Operating Activities Section of the Statement of ...
Which of the Following Statements Are False When Using the ...
Cash Paid to Suppliers Can Be Derived by Adjusting Costs ...
Depreciation Is Subtracted from Net Income in Arriving at a ...
Cash Collected from Customers Can Be Derived by Appropriately Adjusting ...