The only difference between the direct and indirect methods of preparing the statement of cash flows is the manner in which the
A)cash flows from operating activities is presented.
B)cash flows from investing activities is presented.
C)cash flows from financing activities is presented.
D)the schedule of noncash items is presented.

Question

Quizplus · Accepted Answer

The direct and indirect methods of preparing the statement of cash flows differ in the way cash flows from operating activities are presented. The indirect method starts with net income and makes adjustments to convert it to cash flows from operating activities, while the direct method lists the individual cash inflows and outflows from operating activities. The presentation of cash flows from investing and financing activities, as well as the schedule of noncash items, are similar between the two methods.

The Only Difference Between the Direct and Indirect Methods of Preparing