Which method will yield the higher cash flows from financing activities?
A)The indirect method.
B)The direct method.
C)Both direct and indirect methods will yield the same amount.
D)Depends upon the situation.

Question

Quizplus · Accepted Answer

The method (direct or indirect) used for calculating cash flows affects only the presentation of the cash flow from operating activities. Cash flows from financing activities are calculated and presented in the same way under both methods, thus yielding the same amount.

Which Method Will Yield the Higher Cash Flows from Financing