Can anyone explain Direct Cash Flow?

Question

Can anyone explain Direct Cash Flow?

Answer 1

The direct method for creating a cash flow statement separately lists each major item of operating cash receipts ( such as cash received from a customer) & each major item of operating cash payment ( such as cash paid for merchandise).  The cash payments are subtracted from te cash receipts to determine the net cash provided (used) by operating activities.

Answer 2

The Direct Cash Flow is the method that classifies transactions into major classes; operating, investing and financing activities.    It starts with the net income then the increases/decreases from previous year's accounts are either added or deducted to get the cash flow at end of the year.