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melat telila
on Nov 13, 2024

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The indirect and direct methods of preparing the statement of cash flows are identical except for the

A) significant noncash activity section.
B) operating activities section.
C) investing activities section.
D) financing activities section.

Direct Method

The direct method in accounting refers to a way of reporting cash flows from operating activities by directly listing major classes of gross cash receipts and payments.

Indirect Method

A technique used in cash flow statement preparation where net income is adjusted for non-cash transactions and changes in working capital to arrive at operating cash flow.

  • Distinguish between operating, investing, and financing activities in the statement of cash flows.
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Haley GuertinNov 15, 2024
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