Consider the following:
Argument #1: The indirect method presents a firm’s operating cash
receipts and payments and is thus more consistent with the
objectives of the cash flow statement.
Argument #2: The indirect method provides more information than the
direct method and is more useful to analysts in estimating future
operating cash flows.
Which of these arguments support the use of the indirect method for
presenting cash flow from operating activities in the cash flow
statement?
A. Argument #2 only.
B. Argument #1 only.
C. Neither argument.
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