Preparers of the statement of cash flow must choose the direct or indirect method for each classification category on the statement.

Question

Quizplus · Accepted Answer

The choice between the direct or indirect method applies only to the operating activities section of the cash flow statement. Investing and financing activities are always reported in a similar manner, essentially on a direct basis, detailing the specific inflows and outflows of cash.

Preparers of the Statement of Cash Flow Must Choose the Direct