The indirect and direct methods of preparing the cash flow statement are identical except for the

Question

Quizplus · Accepted Answer

The indirect and direct methods of preparing the cash flow statement are identical except for the operating activities section. The investing activities section and financing activities section are presented in the same way in both methods. The only difference is how the operating activities section is presented, with the direct method providing more detailed information about cash inflows and outflows from operating activities. The significant noncash activity section is included in both methods and therefore does not affect the difference between them.

The Indirect and Direct Methods of Preparing the Cash Flow