Asked by Vasilis Lymberis on Jun 11, 2024
Verified
Both the direct method and indirect method will arrive at the same amount for cash flow from operating activities.
Direct Method
A way of presenting the cash flow statement where major classes of gross cash receipts and cash payments are disclosed, providing insight into specific cash flow activities.
Indirect Method
A financial accounting technique used in cash flow statements to adjust net income for the effects of non-cash transactions.
- Become familiar with the contrasts between direct and indirect strategies for reporting cash transactions from operational actions.
Verified Answer
WB
Wyatt BoswellJun 17, 2024
Final Answer :
True
Explanation :
Both the direct method and indirect method are designed to calculate the same amount for cash flow from operating activities, although the way they arrive at this amount is different.
Learning Objectives
- Become familiar with the contrasts between direct and indirect strategies for reporting cash transactions from operational actions.
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