In preparing the operating activities section of the statement of cash flows, most companies in Canada prefer to
A) use the direct method.
B) use the indirect method.
C) present both the indirect and direct methods in their financial reports.
D) prepare the operating activities section on the accrual basis.

Question

Quizplus · Accepted Answer

Most companies in Canada prefer to use the indirect method for the operating activities section of the statement of cash flows because it is generally easier to prepare from existing financial statements and is more widely accepted.

In Preparing the Operating Activities Section of the Statement of Cash