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Assess the comments which follow as being true or false. If the comment is false, in brief describe why.

a) Both the direct and indirect techniques will produce the similar cash flow from operating activities.

b) Depreciation expense is added back to total income when the indirect method is employed.

c) One of the benefits of using the direct method instead of the indirect method is that larger cash flows from financing actions will be reported.

d) The cash paid to suppliers is usually disclosed on the statement of cash flows when the indirect method of statement preparation is used.

e) The dollar change in the Merchandise Inventory account appears on the statement of cash flows just when the direct method of statement preparation is employed.

Basic Finance, Finance

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  • Reference No.:- M921278

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