The direct method of preparing the statement of cash flows is usually viewed as user friendly since it requires less accounting knowledge to understand it.

Question

Quizplus · Accepted Answer

The direct method presents the cash inflows and outflows of an entity in a straightforward manner, making it easier for non-accountants to understand the sources and uses of cash. In contrast, the indirect method requires adjustments to the net income figure, which may be more difficult for some users to comprehend.

The Direct Method of Preparing the Statement of Cash Flows