Almost all U.S.companies have used the indirect method of preparing the statement of cash flows:
A)because most users of the financial statements do not understand the direct method.
B)in spite of the FASB's stated preference for the direct method.
C)because it usually requires less space in the annual report.
D)so that stockholders cannot determine how much cash was spent on executives' salaries.

Question

Quizplus · Accepted Answer

The indirect method is currently used by about approximately 99% of large companies in the United States even though the FASB favors the direct method over the indirect method.However,both methods are considered to be acceptable under GAAP.

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