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

Question

Quizplus · Accepted Answer

The differences between the indirect method and the direct method are evident in the operating activities section of the statement of cash flows. The direct method reports actual cash inflows and outflows from operating activities, while the indirect method adjusts net income for non-cash items and changes in working capital to arrive at the cash flow from operating activities.

The Differences in the Indirect Method and the Direct Method