Which of the following items is relevant when deciding whether to prepare the statement of cash flows using the direct method versus the indirect method?
A)Operating activities only
B)Investing activities only
C)Financing activities only
D)Investing and financing activities only

Question

Quizplus · Accepted Answer

The direct method and indirect method differ in how they present operating activities, which are the only activities relevant in deciding which method to use. Investing and financing activities are reported the same way regardless of the chosen method.

Which of the Following Items Is Relevant When Deciding Whether