- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 5. Analyzing Statements of Cash Flows II
- Subject 1. Evaluating Sources and Uses of Cash
CFA Practice Question
Which of the following is not disclosed on the statement of cash flows prepared under the direct method or on the required supplemental schedule?
B. The major classes of cash receipts and cash payments
C. Cash flow per share information
D. A reconciliation of net income to net cash flows from operating activities
A. The amount of income taxes paid during the year
B. The major classes of cash receipts and cash payments
C. Cash flow per share information
D. A reconciliation of net income to net cash flows from operating activities
Correct Answer: C
This information is not required per SFAS No. 95.
User Contributed Comments 5
| User | Comment |
|---|---|
| Farina | ...and because the direct method deiscloses a lot of data most companies would rather keep private, the indirect method is used almost universally. |
| jainrajeshv | Why D is wrong? |
| surjoy | Because, if your Cash Flows are presented in Direct method, you have to disclose Indirect method as a supplement. |
| YOUCANDOIT | isnt that the other way around surjoy? please correct me if i'm wrong though |
| majesty | YOUCANDOIT, surjoy is correct. Both methods are permitted under IFRS and U.S. GAAP. Both IASB and FASB encourage Direct Method (and require to provide Indirect Method in supplement). That's why few companies present the Direct Method. |