Can you help me come up with one paragraph or so on this, please?
GAAP requires the Statement of Cash Flow to be presented in one of two formats (direct or indirect). The most common method used is the indirect method. Discuss the three sections of the indirect method of presentation for the Statement of Cash Flows. Also discuss why the statement of cash flow is just as important as the income statement.
The three sections of the indirect cash flow statement presentation are as follows:
(1) Operating Activities: This section records the cash inflow/outflow due to the normal operation of the business. Some example cash inflow/outflow in this section includes: paying suppliers, collecting cash from customers, paying employees ...
The cash flow statements and the GAAP method are discussed. The three sections of the indirect method of presentation for the statement of cash flows is determined.