Examlex
Which statement is true?
Direct Method
A cash flow statement preparation approach that lists major payments and receipts of cash from operational activities directly.
Indirect Method
An approach used in cash flow statements where net income is adjusted for non-cash transactions, deferred revenues, and expenses to calculate cash flow from operating activities.
Indirect Approach
A method used in cash flow statements where net income is adjusted for non-cash transactions and changes in working capital to calculate cash flow from operating activities.
Noncash Charges
Expenses reported on an income statement that do not involve actual cash flow, such as depreciation, amortization, and stock-based compensation.
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