Which of the following is not true of the direct method of preparing a statement of cash ﬂows?
A) It gives the user a sense of the magnitude of gross dollars ﬂowing in and out of the company.
B) It has the same cash ﬂows from investing and ﬁnancing activities as the indirect method.
C) It results in a different net cash from operating activities than the indirect method.
D) It reports the same net increase or decrease in cash as the indirect method.

Question

Quizplus · Accepted Answer

The direct and indirect methods of preparing a statement of cash flows will ultimately report the same net cash from operating activities. The difference between the two methods lies in how the cash flows from operating activities are presented, not in the final amount.

Which of the Following Is Not True of the Direct