The indirect and direct methods of preparing the statement of cash flows are identical except for the
A) significant noncash activity section.
B) operating activities section.
C) investing activities section.
D) financing activities section.

Question

Quizplus · Accepted Answer

The indirect and direct methods of preparing the statement of cash flows differ only in the operating activities section. The indirect method adjusts net income for changes in non-cash working capital items and non-operating gains and losses, while the direct method lists all cash receipts and payments from operating activities.

The Indirect and Direct Methods of Preparing the Statement of Cash