P23-7-Final - p237 a

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p23-7 a Both methods can be used and are accepted in most cases.  Some people or  organizations might prefer the direct method more.  The direct method's advantage is that it shows in more detail where money is coming into  the company and what areas the money is coming out of the company. For the indirect method though it shows a link to the balance sheet and  income statement.  It shows how items like accounts receivable and accounts payable have either increase or decreased.  The decision on which method to use will depend on what it is being used for and the preference of that person. b Winston Company Statement of Cash Flows For the Year Ending May 31, 2008 Cash flows from operating activities Cash receipts from customers $1,233,250  Cash payments To suppliers $674,000  For Interest Expense 73,000  For Employees 276,850  For Other Expenses 10,150  For income taxes
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This note was uploaded on 02/19/2010 for the course ACC 421 taught by Professor Unknown during the Spring '10 term at University of Phoenix.

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P23-7-Final - p237 a

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