The Financial Accounting Standard Board (FASB) encourages companies to prepare their statement of cash flows using the ___________.

Question

Quizplus · Accepted Answer

The FASB encourages the use of the direct method for preparing the statement of cash flows because it provides more useful information about a company's operating activities than the indirect method. However, if a company finds it too difficult or costly to use the direct method, it can use the indirect method instead.

The Financial Accounting Standard Board (FASB) Encourages Companies to Prepare