Section 2
Calculating Cash Flows
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Version 3
By Boundless
By Boundless
Boundless Accounting
Accounting
by Boundless
2 concepts
Preparation of the Statement of Cash Flows: Direct Method
There is an indirect and a direct method for calculating cash flows from operating activities.
Preparation of the Statement of Cash Flows: Indirect Method
The indirect method starts with net-income while adjusting for non-cash transactions and from all cash-based transactions.