Which of the following methods of reporting cash flows provided by operating activities does the Financial Accounting Standards Board recommend?
A)The indirect method
B)The direct method
C)An option of either indirect method or the direct method
D)FASB does not state a preference.

Question

Quizplus · Accepted Answer

The Financial Accounting Standards Board (FASB) recommends the direct method for reporting cash flows from operating activities because it provides a clearer view of cash flows into and out of a business. However, most companies use the indirect method due to its simplicity.

Which of the Following Methods of Reporting Cash Flows Provided