What Is the Difference Between the Direct Method and the Indirect

question 47

Multiple Choice

What is the difference between the direct method and the indirect method of presenting the cash flow from operations?

• A) The direct method is more reliable since it adjusts net income to reflect the cash flow from operations
• B) The indirect method lists all cash-in versus cash-out accounts in determining the cash flow from operations
• C) The direct method is the most popular method of determining the cash flow from operations.
• D) The indirect method adjusts net income to reconcile it to net cash flow from operating activities.

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