When preparing the Statement of Cash Flows for a not-for-profit organization, the direct or indirect method of may be used.

Question

Quizplus · Accepted Answer

Both the direct and indirect methods are allowed for preparing the statement of cash flows for not-for-profit organizations, as per the Generally Accepted Accounting Principles (GAAP). However, the indirect method is more commonly used as it is simpler and less time-consuming.

When Preparing the Statement of Cash Flows for a Not-For-Profit