The indirect and direct methods of preparing the statement of cash flows are identical except for the Select one: a. significant noncash activity section. b. financing activities section. c. investing activities section. d. operating activities section.

Question

Valentin

Business

6 April, 12:52

The indirect and direct methods of preparing the statement of cash flows are identical except for the Select one: a. significant noncash activity section. b. financing activities section. c. investing activities section. d. operating activities section.

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Answers (1)

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Essence Irwin · Answer 1

The correct answer is D

Explanation:

Cash flow statement, is the one of the foremost financial statement that states the how changes in the accounts of the balance sheet and income affect the cash equivalent and cash and also break the analysis down into financing, operating and investing activities.

The operating section of the cash flow statement could be shown by either of the method that is direct and indirect. But with either method, the financing and investing activities are identical. Therefore, the operating section is the only difference in the statement.