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Question

You can generally convert indirect format to the direct format by:

  • Aggregate all revenue and all expenses.
  • Remove all non-cash items from it and break out remaining items into relevant cash flow items.
  • Convert accrual amounts to cash flow amounts by [...]
Answer
adjusting for working capital changes.

Question

You can generally convert indirect format to the direct format by:

  • Aggregate all revenue and all expenses.
  • Remove all non-cash items from it and break out remaining items into relevant cash flow items.
  • Convert accrual amounts to cash flow amounts by [...]
Answer
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Question

You can generally convert indirect format to the direct format by:

  • Aggregate all revenue and all expenses.
  • Remove all non-cash items from it and break out remaining items into relevant cash flow items.
  • Convert accrual amounts to cash flow amounts by [...]
Answer
adjusting for working capital changes.
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Subject 2. Preparing the Cash Flow Statement
the financing activity of paying cash dividends of $48,000. The statement of cash flows is prepared as follows: Conversion of Cash Flows from the Indirect to the Direct Method <span>Although the indirect method is most commonly used by companies, the analyst can generally convert it to the direct format by following a simple three-step process. Aggregate all revenue and all expenses. Remove all non-cash items from aggregated revenues and expenses and break out remaining items into relevant cash flow items. Convert accrual amounts to cash flow amounts by adjusting for working capital changes. <span><body><html>

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