If the direct method is used to prepare the Operating Activities category of the statement of cash flows,the amount of cash paid to suppliers of inventory is shown as an addition in this section of the statement.

Question

Quizplus · Accepted Answer

In the direct method, the amount of cash paid to suppliers of inventory is shown as a deduction (or outflow) in the Operating Activities category, as it represents cash going out of the business to pay for inventory.

If the Direct Method Is Used to Prepare the Operating