Question

The indirect and direct methods:

A) Are two allowable methods to present operating activities in the statement of cash flows.
B) Affect the presentations of operating, investing, and financing activities.
C) Are used by companies about equally in actual practice.
D) Arrive at different amounts for net cash flows from operating activities.

Answer 1

Answer A

Explanation im sure because i got a 100 on my test

Answer 2

Answer:

The indirect and direct methods:

A) Are two allowable methods to present operating activities in the statement of cash flows.

Explanation:

• The option A is correct as these two different methods of cash flows are used by different companies and businesses to determine their cash flows.
• The option B is incorrect as they don't affect the presentations of operating, investing and financing activities but only limited to cash flows.
• The option C is incorrect as indirect method of cash flow is mostly used by the companies as compared to the direct method as direct method take large amount of time.
• The option D is incorrect as net cash flow remains the same.