The differences in the indirect method and the direct method of the statement of cash ﬂows are evident in which section?
A) Operating activities
B) Investing activities
C) Financing activities
D) Cash reconciliation section

Question

Quizplus · Accepted Answer

The differences between the indirect and direct methods of the statement of cash flows are evident in the operating activities section. The direct method details specific sources and uses of cash, while the indirect method adjusts net income for non-cash transactions and changes in working capital to calculate cash flow from operating activities.

The Differences in the Indirect Method and the Direct Method