Question

The only part that differs in a statement of cash flows using the direct method rather...

The only part that differs in a statement of cash flows using the direct method rather than the indirect method is the:

Question options:

investing activities section.

operating activities section.

financing activities section.

none of the above.

Homework Answers

Answer #1

The only part that differs in a statement of cash flows using the direct method rather than indirect method is

" operating activities section "

Statement of cash flows can be prepared by using two methods i.e., Direct method and Indirect method.

The direct method of presenting the statement of cash flow presents the cash flows associated with the items that affects the cash. items such as

i)Cash paid to employees

ii)Cash received from debtors..

Under the indirect method of preparation of statement of cash flows, it presents the information about cash that is generated from operations and effects of various changes in the balance sheet.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1)In the statement of cash flows, in which section is the cash payment of salaries reported?...
1)In the statement of cash flows, in which section is the cash payment of salaries reported? A. Operating Activities B. Investing Activities C. Financing Activities D. Schedule of Noncash Transactions E. None of the above 2)In the statement of cash flows, in which section is the cash payment of dividends reported? A. Operating Activities B. Investing Activities C. Financing Activities 3)In the statement of cash flows, in which section is the cash receipt from the issuance of common stock reported?...
If a company is using the indirect method to prepare the statement of cash flows, identify...
If a company is using the indirect method to prepare the statement of cash flows, identify where an increase in the accounts receivable account should be reported: Multiple Choice An increase in cash flows from operating activities An increase in cash flows from investing activities A decrease in cash flows from operating activities A decrease in cash flows from investing activities An increase in cash flows from financing activities
Direct or indirect? Most companies report operating cash flows using the ___________ method. Net income is...
Direct or indirect? Most companies report operating cash flows using the ___________ method. Net income is reconstructed on a cash basis when the ___________ method is used to report the net cash flows provided (used) by operating activities. The net cash amount provided by operating activities using the direct method is ____________ that computed using the indirect methods. The FASB recommends that the operating activities section of the statement of cash flows be reported using the ____________ method.
1- When preparing a statement of cash flows using the indirect method, each of the following...
1- When preparing a statement of cash flows using the indirect method, each of the following should be classified as an operating cash flow except: Multiple Choice An increase in accounts receivable. A decrease in accounts payable. Proceeds from the disposal of a long-term asset with no gain or loss. An increase in prepaid expenses. A decrease in accrued expenses payable. 2- Marshland Company is preparing the company's statement of cash flows for the fiscal year just ended. The following...
Entity A prepares its Statement of Cash Flows in accordance with US GAAP using the indirect...
Entity A prepares its Statement of Cash Flows in accordance with US GAAP using the indirect method. Indicate the reporting of the following transaction or event by the major categories on the statement: Entity A's income statement reveals depreciation expense of $10,000. Cash Flows From Operating Activities–Add to Net Income Cash Flows From Operating Activities–Deduct from Net Income Cash Flows From Investing Activities Cash Flows From Financing Activities Non-cash Entity A prepares its Statement of Cash Flows in accordance with...
True or False 1. The approach to preparing the cash flow statement relies on the following...
True or False 1. The approach to preparing the cash flow statement relies on the following rearrangement of the balance sheet equation: Change in cash = Change in (Liabilities + Stockholders' Equity + Noncash Assets). 2. Major investing and financing activities that do not involve cash do not have to be reported as part of the statement of cash flows. 3. In the decline phase, the company continues to enjoy positive operating cash flows but stops spending cash on investing...
1) On an indirect method statement of cash​ flows, a decrease in inventory would​ be: A.reflected...
1) On an indirect method statement of cash​ flows, a decrease in inventory would​ be: A.reflected in the investing activities section B.deducted from net income C.netted against any decreases in accounts payable D.added to net income 2) Sometimes income and cash flow follow different patterns. True False 3)Cash means more than just cash on hand and cash in the bank. Highly​ liquid, shortminus−term investments that are easily convertible into cash are​ called: A.cash equivalents B.accounts receivable C.promissory notes D.common shares...
1) Which of the following is a method for reporting cash flows from operating activities that...
1) Which of the following is a method for reporting cash flows from operating activities that begins with net income and reconciles to cash flows from operating​ activities? A.accrual method B.direct method C.indirect method D.cashminus−basis method 2) Under the indirect method of preparing a statement of cash​ flows, cash disbursed for the acquisition of a capital asset​ is: A.added in the financing activities section B.added in the investing activities section C.subtracted in the operating activities section D.subtracted in the investing...
1.) Why is the statement of cash flows a useful document? 2.) Define the following terms...
1.) Why is the statement of cash flows a useful document? 2.) Define the following terms as they relate to the statement of cash flows: cash flows: cash, operating activities, investing activities, and financing activities. 3.) How does the direct method differ from the indirect method?
1. On an indirect method statement of cash flows, the purchase of machinery in exchange for...
1. On an indirect method statement of cash flows, the purchase of machinery in exchange for common shares is: Select one: a. ignored b. reflected in the investing activities section c. shown in the schedule of noncash investing and financing activities which accompanies the statement of cash flows d. reflected in the operating activities section Question 2. The statement of cash flows is designed to fulfill all of the following purposes except: Select one: a. to determine the company's ability...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT