Asked by Ashley Iguina on May 01, 2024
Verified
If the direct method to prepare the operating section of the cash flow statement is used instead of the indirect method, changes will be required in the financing and investing sections too.
Direct Method
A way of preparing a cash flow statement where actual cash flows from operating activities are listed directly.
- Conduct financial analyses and computations of cash flows generated through operational activities, investments, and financial engagements.
Verified Answer
VR
Veronica RogersMay 01, 2024
Final Answer :
False
Explanation :
The choice between the direct and indirect methods for preparing the operating section of the cash flow statement does not affect the financing and investing sections, as these sections are prepared using the same approach regardless of the method chosen for the operating section.
Learning Objectives
- Conduct financial analyses and computations of cash flows generated through operational activities, investments, and financial engagements.