The FASB encourages the use of the indirect method over the direct method.

Name: The FASB encourages the use of the indirect method over the direct method.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The FASB allows both the direct and indirect methods for reporting cash flows from operating activities but does not prefer one over the other. It requires a reconciliation of net income to net cash provided by operating activities if the direct method is used.

The FASB Encourages the Use of the Indirect Method Over