The direct method of presenting the financing activities section of the statement of cash flow reconciles net income to net cash provided by financing activities.

Question

Quizplus · Accepted Answer

The direct method of presenting the financing activities section of the statement of cash flow reconciles the changes in liability and equity accounts to determine net cash provided by financing activities, not net income. The indirect method reconciles net income to net cash provided by financing activities.

The Direct Method of Presenting the Financing Activities Section of the Statement