Methods :
An enterprise can determine cash flows from operating activities using either :
(a) Direct Method: The direct method, whereby major classes of gross cash receipts and gross cash payments are considered; or
(b) Indirect Method: The indirect method, whereby net profit or loss is adjusted for the effects of transactions of a non-cash nature, deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing activities.
(a) Direct Method: The direct method, whereby major classes of gross cash receipts and gross cash payments are considered; or
(b) Indirect Method: The indirect method, whereby net profit or loss is adjusted for the effects of transactions of a non-cash nature, deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing activities.
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