Question

Consider the following: Argument #1: The indirect method presents a firm’s operating cash receipts and payments...

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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