CFA Practice Question

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CFA Practice Question

While the indirect method of preparing the Statement of Cash Flows is more commonly used, the direct method is considered to be more easily understood by users. True or False?
Correct Answer: True

The direct method classifies cash flows by major sources of cash receipts and cash disbursements and does not involve reconciling a net income amount to a cash basis amount from an accrual basis in the body of the statement.

User Contributed Comments 1

User Comment
kingirm i find indirect method easier to grasp. ..
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