Which of the following statements is true?
A) Standard setters encourage the use of the direct method over the indirect method.
B) The direct method is known as the reconciliation method.
C) Under U.S. GAAP, the indirect method starts with income before income taxes.
D) All of these statements are true.

Question

Quizplus · Accepted Answer

Standard setters, such as the Financial Accounting Standards Board (FASB), encourage the use of the direct method for presenting cash flows from operating activities, although the indirect method is more commonly used in practice.

Which of the Following Statements Is True