The operating section of a cash flow statement using the indirect method is prepared differently from the operating section of a cash flow statement using the direct method.

Question

Quizplus · Accepted Answer

In the operating section of a cash flow statement prepared using the indirect method, adjustments are made to the net income figure to arrive at the net cash flow from operating activities. However, in the operating section prepared using the direct method, the actual cash inflows and outflows are listed. Thus, the two methods have different approaches to presenting the operating section of the cash flow statement.

The Operating Section of a Cash Flow Statement Using the Indirect