Which of the following statements concerning the cash flow statement is true?
A) The cash flow statement is usually more accurate when using the indirect method.
B) A cash flow statement can be prepared using the direct or indirect method.
C) The cash flow statement reports earnings per share.
D) The cash flow statement is an optional financial statement for external reporting purposes.

Question

Quizplus · Accepted Answer

The cash flow statement can indeed be prepared using either the direct or indirect method. The direct method reports major classes of gross cash receipts and payments, while the indirect method adjusts net income for the effects of non-cash transactions.

Which of the Following Statements Concerning the Cash Flow Statement