In Accounting, What Is Direct Method?
In accounting, the direct method is a way to present cash flow statements, showing how cash was received and used in the business as of a certain period of time. It is a standardized report, presenting information on cash not available in other types of financial reports. This statement is important for bankers and investors, and anyone interested in cash applications of a business. Cash flow statements in the US can be prepared using the direct method or the indirect method.