The only difference between the cash flow statement prepared under the indirect method as opposed to the direct method is the manner in which the:
A)cash flows from financing activities is presented.
B)schedule of noncash items is presented.
C)cash flows from investing activities is presented.
D)cash flows from operating activities is presented.

Question

Quizplus · Accepted Answer

The only difference between the cash flow statement prepared under the indirect method as opposed to the direct method is the manner in which the cash flows from operating activities is presented. Under the indirect method, the net profit is adjusted for non-cash items and changes in working capital to arrive at the cash flow from operating activities, while under the direct method, actual cash inflows and outflows from operating activities are reported. The presentation of cash flows from financing and investing activities and the schedule of noncash items are the same under both methods.

The Only Difference Between the Cash Flow Statement Prepared Under