The only difference in a statement of cash flows prepared under the direct method as opposed to the indirect method is the presentation of operating activities.

Question

Quizplus · Accepted Answer

The direct method and the indirect method report the same types of cash flows, but the presentation of operating activities is different. The direct method reports operating activities as gross cash receipts and gross cash payments for each specific operating activity, while the indirect method reports operating activities as net income adjusted for non-cash items and changes in working capital accounts.

The Only Difference in a Statement of Cash Flows Prepared