03.
What is the purpose of preparing a Cash Flow Statement? How is it
prepared? Explain the difference between direct and indirect method of
preparation of cash Flow statement.
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Answer: In the direct method, all individual instances of cash that is received or paid out are tallied up and the total is the resulting cash flow. In the indirect method, the accounting line items such as net income, depreciation, etc. are used to arrive at cash flow.
Explanation:
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