The primary difference between a cash flow statement prepared using the indirect method and one prepared using the direct method is
A)the financing section is different.
B)the investing section is different.
C)the operating section is different.
D)all three sections of the cash flow statement are different.
E)the investing and financing sections are different.

Question

Quizplus · Accepted Answer

The primary difference between the cash flow statement prepared using the indirect method and the direct method lies in the operating activities section. The indirect method starts with the net income figure and adjusts it for non-cash expenses, whereas the direct method reports each cash inflow and outflow from operating activities separately. The investing and financing sections may differ slightly, but both methods report the same overall cash flows from these activities.

The Primary Difference Between a Cash Flow Statement Prepared Using