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

Question

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Both the direct and indirect method can be used for preparing the Statement of Cash Flows for a private not-for-profit organization. The Financial Accounting Standards Board (FASB) allows the use of either method for presenting the operating activities section of the statement. However, most organizations tend to use the indirect method.

When Preparing the Statement of Cash Flows for a Private