Describe similarities between the indirect and the direct method of te statement of cash flow. What is the same? What are the differences? If you have to choose between the two, which will you choose and why.

Describe similarities between the indirect and the direct method of te statement of cash flow. What is the same? What are the differences? If you have to choose between the two, which will you choose and why.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Describe similarities between the indirect and the direct method of te statement of cash flow.

What is the same?

What are the differences?

If you have to choose between the two, which will you choose and why.

For example:

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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