Which of the following statements about the statement of cash flows is FALSE?
A) The indirect method and the direct method will produce the same amount of cash flow.
B) The indirect method begins with net income and adjusts to calculate operating cash flows.
C) Both the direct and indirect methods include 3 types of cash flows.
D) The operating activities section of both the direct and the indirect method are the same.

Question

Quizplus · Accepted Answer

The operating activities section differs between the direct and indirect methods. The direct method lists actual cash inflows and outflows from operating activities, while the indirect method starts with net income and adjusts for non-cash transactions and changes in working capital to arrive at cash provided by operating activities.

Which of the Following Statements About the Statement of Cash