Question

The direct method of presenting cash flows provides more detail on sources of cash whereas the...

The direct method of presenting cash flows provides more detail on sources of cash whereas the indirect method provides details of accruals for the period.

True or false

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Correct answer: True

There are two methods of presenting cash flow statements of a firm. 1.Direct method and 2.Indirect method

Direct method: Cash flows presented as actual cash inflow and outflow on cash basis.

Indirect method: Cash flow statement begins with net income on an accrual basis and subsequently adds and subtracts non-cash items to reconcile to actual cash flows.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
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....
1/ Both the direct method and the indirect method of computing net cash flow from operating...
1/ Both the direct method and the indirect method of computing net cash flow from operating activities convert accrual-based income statement amounts into cash flows. TRUE/ FALSE 2/ Under the indirect method, when machinery is sold at a gain, the gain is added in the operating section of the statement of cash flows and the cost is added in the investing section. TRUE/FALSE 3/ All of the following are financing activities except: Multiple Choice * 

Selling capital stock.
 * 

Lending...
In preparing the cash flows from operating activities section of the statement of cash flows by...
In preparing the cash flows from operating activities section of the statement of cash flows by the indirect method the net decrease in inventories from the beginning to the end of the period is added to net income for the period true or false
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.
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.
in preparing the cash flows from operating activities section of the statement of cash flows by...
in preparing the cash flows from operating activities section of the statement of cash flows by the indirect method the amortization of bond discount for the period is deducted from the net income for the period true our faults
the direct method of reporting operating cash flows:
the direct method of reporting operating cash flows:
Which of the following is true concerning the direct method of calculating operating cash flows? does...
Which of the following is true concerning the direct method of calculating operating cash flows? does not show how the changes in the elements of a company's operating cycle affected its operating cash flows reports a company's operating cash inflows separately from its operating cash outflows does not tie the net income reported on a company's income statement to the net cash provided from operating activities All of these choices are true concerning the direct method.
Which of the following questions would NOT be answered by presenting the statement of cash flows?...
Which of the following questions would NOT be answered by presenting the statement of cash flows? What amount of accounts receivable was considered uncollectible? Where did the cash come from during the period? What was the change in the cash balance during the period? What was the cash used for during the period?
Determining Selected Amounts for Cash Flows from Operating Activities—Direct Method Selected data taken from the accounting...
Determining Selected Amounts for Cash Flows from Operating Activities—Direct Method Selected data taken from the accounting records of Ginis Inc. for the current year ended December 31 are as follows: Balance, December 31 Balance, January 1 Accrued expenses payable (operating expenses) $7,130 $7,790 Accounts payable (merchandise creditors) 38,180 42,140 Inventories 74,120 80,570 During the current year, the cost of merchandise sold was $414,900, and the operating expenses other than depreciation were $95,500. The direct method is used for presenting the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT