The advantages of the direct method include all of the following except:
A)It allows for more detailed analysis of operating cash flows.
B)It provides more information than the indirect method to relate cash inflows and outflows.
C)It allows for more reliable prediction of future cash flows.
D)Comparisons between companies are facilitated since most U.S.companies use the direct methoD.Most U.S.companies use the indirect method.

Question

Quizplus · Accepted Answer

The statement suggests that most U.S.companies use the indirect method, therefore the direct method may not facilitate comparisons between companies. Therefore, the advantage mentioned in (D) is not completely accurate. The other options (A, B, and C) are advantages of the direct method.

The Advantages of the Direct Method Include All of the Following