There are 2 methods of preparing a Statement of cashflows, the direct and indirect methods. These 2 methods differ for which section/s (select all that apply):Group of answer choicesNone of the activity sections differOperating activities sectionInvesting activities sectionFinancing activities sectionSignificant non-cash activities section
Question
There are 2 methods of preparing a Statement of cashflows, the direct and indirect methods. These 2 methods differ for which section/s (select all that apply):Group of answer choicesNone of the activity sections differOperating activities sectionInvesting activities sectionFinancing activities sectionSignificant non-cash activities section
Solution
The two methods of preparing a Statement of Cash Flows, the direct and indirect methods, differ for the Operating Activities section. The Investing Activities and Financing Activities sections are prepared the same way under both methods. The Significant Non-Cash Activities section is not a part of the cash flow statement, but is often included as a separate note or schedule to the financial statements. Therefore, the correct answer is "Operating activities section".
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