When using the indirect method,the amount of net cash flow from operating activities will be higher than it would be if the direct method were used.

Question

Quizplus · Accepted Answer

The amount of net cash flow from operating activities will be the same regardless of whether the indirect method or direct method is used. The only difference is in the presentation and classification of cash inflows and outflows. The indirect method reconciles net income with net cash flow from operating activities by adjusting noncash items and changes in working capital, while the direct method presents actual cash receipts and payments from operating activities.

When Using the Indirect Method,the Amount of Net Cash Flow