The direct approach differs from the indirect approach with regard to preparing which section of the Statement of Cash Flows?
A)Operating activities
B)Investing activities
C)Financing activities
D)There is no difference between the two approaches.

Question

Quizplus · Accepted Answer

The direct approach and the indirect approach differ in the preparation of the operating activities section of the Statement of Cash Flows. The direct approach presents the cash inflows and outflows directly related to the company's operating activities, while the indirect approach starts with net income and adjusts for non-cash items and changes in current assets and liabilities. The investing and financing activities sections are prepared in the same way for both approaches.

The Direct Approach Differs from the Indirect Approach with Regard