Review the discussion and discuss whether you agree or disagree with the intent and give an example of either method:

Each month, companies that use the accrual method of accounting must prepare a cash flow statement. Those statements are prepared using one of two methods: direct or indirect method. While the two methods vary, each ends up with the same ending number for the accounting period. The direct method identifies a companys sources and cash uses and divides those into three sections that contain cash receipts and cash payments. The three sections are operating, investing, and financing activities. Operations involve receipts and payments from normal business operations. Investing includes the purchase of long-term assets and investments. Financing activity includes borrowing money, payments made to creditors, and payments to investors. The indirect cash flow statement has less information than the direct. Companies prepare this statement by starting with the net income reported from the income statement and then make adjustments for all non-cash items. Basically, the indirect method takes the accrual based income statement and converts it to cash based income statement. The Financial Accounting Standards Board prefers the direct method for companies that are publicly held and sell stock. Companies prefer the indirect method, as it is easier to prepare, as the information is readily available from other financial reports. For reporting purposes, and ease of understanding I prefer the indirect method. Companies that I have worked with in the dental space all use this method. I find it is easier to read and provides a clear picture of performance, as well as useful information regarding opportunities for improvement in performance. I find the direct method a little too detailed and over the top in reporting information that is not pertinent.