Cash flow statement

1. Explain the difference between the direct and indirect formats for presenting the statement of cash flows.

2. If accounts receivable increases during the period, which is greater, collections from customers or sales on account? Why?

3. Where and how do gains and losses appear on the statement of cash flows on an indirect basis? Why?

1. Explain the objectives of the cash flow statement.

2. Explain how the cash flow statement, in conjunction with the other financial statements, is useful for external users.

3. Explain the importance of the sections of the statement of cash flows.

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