Both the direct and indirect methods yield the same net cash flow from operations.

Question

Quizplus · Accepted Answer

Both methods ultimately calculate the same net cash flow from operations, but they differ in the way they present the individual cash inflows and outflows. The direct method lists the actual cash receipts and payments, while the indirect method starts with net income and adjusts for non-cash items such as depreciation and changes in current assets and liabilities.

Both the Direct and Indirect Methods Yield the Same Net