Which of the following statements is true of the direct and indirect methods of

Question

Which of the following statements is true of the direct and indirect methods of preparing the statement of cash flows? A. The investing activities section is the only section that differs between the direct and indirect methods. B. The indirect method shows three types of cash flows, but the direct method does not. C. There is no difference in the way the operating activities section is presented. D. The indirect method and the direct method will produce the same amount of net cash flow from operating activities.

Explanation / Answer

Solution-

D. The indirect method and the direct method will produce the same amount of net cash flow from operating activities.

Explanation-

In the both method direct or indirect for preparing a statement of cash flows the net cash flow from the operating activities are same.

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