Which method of preparing the statement of cash flows reports all cash payments and cash receipts from operating activities?
A)Indirect method
B)Comprehensive method
C)Reporting method
D)Direct method

Question

Quizplus · Accepted Answer

The direct method of preparing the statement of cash flows reports all cash payments and cash receipts from operating activities. It shows individual categories of operating cash receipts and payments, such as cash received from customers and cash paid to suppliers. This method provides more detailed information about the operating activities of the company, but it is more time-consuming and expensive to prepare than the indirect method.

Which Method of Preparing the Statement of Cash Flows Reports