1) Which of the following statements is true concerning the direct and indirect methods of preparing the cash flow statement?

Select one:

a. The indirect method of preparing the cash flow statement breaks down cash flows based on actual receipts and payments.

b. The indirect method for preparing cash flow statements is the most widely used method.

c. A cash flow statement prepared using the direct method has only one section; a cash flow statement prepared using the indirect method has three sections.

d. The indirect method of preparing the cash flow statement starts with sales.

2) An increase in accounts receivable from one year to the next:

Select one:

a. None of the choices

b. Decreases cash flow

c. Does not affect cash flow

d. Increases cash flow