just a 5-10 sentence response to a fellow classmates DQ post

The main purpose of this week's discussion is to understand the difference between each cash flow method. The two methods are direct and indirect. The direct method, "adds up all of the cash payments and receipts, including cash paid to suppliers, cash receipts from customers, and cash paid out in salaries."(Investopedia) Small businesses find this method to be the easiest. The indirect method, is calculated by adjusting net income by adding or subtracting differences resulting from non-cash transactions. Non-cash items show up in the changes to a company's assets and liabilities on the balance sheet from one period to the next."(Investopedia) Out of both of these methods, the direct method provides the best understanding of the uses of cash in an accounting period because it shows the actual amounts. It is a requirement to convert the income statement to cash because it shows clearly a company's true sales trends and performance. If a customer purchases something from a company through a credit account it can be looked up through the accrual The main purpose of this week's discussion is to understand the difference between each cash flow method. The two methods are direct and indirect. The direct method, "adds up all of the cash payments and receipts, including cash paid to suppliers, cash receipts from customers, and cash paid out in salaries."(Investopedia) Small businesses find this method to be the easiest. The indirect method, is calculated by adjusting net income by adding or subtracting differences resulting from non-cash transactions. Non-cash items show up in the changes to a company's assets and liabilities on the balance sheet from one period to the next."(Investopedia) Out of both of these methods, the direct method provides the best understanding of the uses of cash in an accounting period because it shows the actual amounts. It is a requirement to convert the income statement to cash because it shows clearly a company's true sales trends and performance. If a customer purchases something from a company through a credit account it can be looked up through the accrual