Which method of preparing the statement of cash flows is required by U.S.GAAP?
A)direct
B)indirect
C)funds flow
D)either direct or indirect may be used if appropriate note disclosure is included
E)either direct or funds flow may be used if appropriate note disclosure is included

Question

Quizplus · Accepted Answer

U.S. GAAP allows for either the direct or indirect method to be used for preparing the statement of cash flows. However, if the direct method is used, a reconciliation of net income to net cash provided by operating activities (which is essentially the indirect method) must also be provided.

Which Method of Preparing the Statement of Cash Flows Is