The indirect method and the direct method of preparing the statement of cash flows
A)always produce the same totals for net cash from operating activities.
B)sometimes produce the same totals for net cash from operating activities.
C)have different totals for net cash from financing activities.
D)have different totals for net cash from investing activities.
E)have different answers for the change in cash.

Question

Quizplus · Accepted Answer

The indirect and direct methods of preparing the statement of cash flows always produce the same totals for net cash from operating activities. The difference between the two methods lies in how the cash flows from operating activities are presented, not in the total amount reported.

The Indirect Method and the Direct Method of Preparing the Statement