Asked by
Claire Predtechenskis
on Nov 14, 2024
Verified
For a company using the direct method, both the operating activities and investing activities will report the same net amounts provided or used as the indirect method, but the amount reported under financing activities will be different.
Direct Method
A cash flow statement preparation approach that lists specific types of operating cash receipts and payments, making it straightforward to see sources and uses of cash.
Financing Activities
Transactions that involve raising capital and repaying investors, affecting the equity and liabilities on the company's balance sheet.
- Gain insight into the contrasting direct and indirect techniques for recording cash flows stemming from operating activities.
- Segregate the activities into operating, financing, and investing categories.
Verified Answer
JA
Learning Objectives
- Gain insight into the contrasting direct and indirect techniques for recording cash flows stemming from operating activities.
- Segregate the activities into operating, financing, and investing categories.
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