Use of the direct method on the cash flow statement frequently results in non-articulation.

Name: Use of the direct method on the cash flow statement frequently results in non-articulation.
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Question

Quizplus · Accepted Answer

The direct method of preparing a cash flow statement results in a clear articulation between the income statement and the cash flow statement, as it directly adjusts each line item of the income statement to convert it from the accrual basis to the cash basis.

Use of the Direct Method on the Cash Flow Statement