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

A way of reporting cash flows from operating activities by listing major classes of gross cash receipts and payments.

Indirect Method

A way of reporting cash flows from operating activities by starting with net income and adjusting for items that affected reported net income but didn't involve actual cash flows.

Operating Activities

Activities directly related to the day-to-day business operations, including cash flows from selling products or providing services.