Which of the following is not true of the direct method of preparing a statement of cash flows?
A)it gives the user a sense of the magnitude of gross dollars flowing in and out of the company.
B)it has the same cash flows from investing and financing activities as the indirect method.
C)it has a different net cash inflow (outflow)from operating activities than the indirect method.
D)it reports the same net increase or decrease in cash as the indirect method.

Question

Quizplus · Accepted Answer

The direct method and the indirect method result in the same net cash inflow (outflow) from operating activities, as they are just different ways of presenting the same information.

Which of the Following Is Not True of the Direct