What is the primary difference between the direct and indirect methods of presenting the statement of cash flows?
Explanation
The key distinction between the direct and indirect methods lies exclusively in how the cash flows from operating activities are calculated and presented. All other sections of the statement are the same.
Other questions
Which of the following is NOT a primary purpose of the statement of cash flows?
Cash receipts from interest and dividends are classified as which type of activity on the statement of cash flows?
The issuance of common stock in exchange for land would be reported in which section of the statement of cash flows or its accompanying notes?
When preparing the operating activities section of the statement of cash flows using the indirect method, what is the treatment for depreciation expense?
Using the indirect method, if Accounts Receivable increases during the period, how is this change treated in the operating activities section?
Free cash flow is calculated using which of the following formulas?
The sale of equipment at a loss would be reported on the statement of cash flows in which manner?
Which of the following activities is classified as a financing activity?
If Josh's PhotoPlus reported net income of $73,000, depreciation expense of $7,000, a gain on disposal of equipment of $2,500, an increase in accounts receivable of $4,000, and a decrease in accounts payable of $3,800, what is its net cash provided by operating activities?
According to the direct method, how are cash receipts from customers calculated?
The information to prepare the statement of cash flows generally comes from all of the following sources EXCEPT:
The Chicago Corporation had net cash provided by operating activities of $29,300, capital expenditures (purchase of equipment) of $19,000, and paid cash dividends of $9,000. What was its free cash flow?
How is an increase in the Inventory account treated under the indirect method?
A company issues bonds payable in exchange for land. This transaction would be classified as a: