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The Statement of Cash Flows Can Be Prepared Using Two

question 10

True/False

The statement of cash flows can be prepared using two different methods-the direct method and the indirect method. Although the indirect method is easier to use, the direct method is considered to be a more favorable method of presenting the data.

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Definitions:

Indirect Approach

A communication strategy where the main point is presented after providing background information, often used to soften negative news.

Prepared

The state of being ready and well-equipped to handle or deal with something.

Obscured

Refers to something that is not clear or hard to understand due to being hidden or covered.

Direct Approach

A communication structure that begins with the primary concept, like a suggestion, verdict, or appeal, and is then supported by subsequent evidence.

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