ACTIVITY 45 OPERATING ACTIVITIES-DIRECT AND INDIRECT METHODS Purpose: * Undestand the direct and indirect method of reporting operating activities Refer to the information immedialely above to arawer the following questions. Q1 The indirect format of the operating section staits with (sales fevenue f net income). 5 tatement. A above reparts net cash from operating actwities usang the (dirket / indirect) method, whereas statement 8 uses the (direct / indirect) method. Q2 The cirect and indirect methods report the (same / different) amount for net cash from operating activities: However, the (direct / indirect) method conveys amounts aleeady reported on the income statement and charges in balance sheet actounts, whereas the [direct / Indirect) method reveals new information not found on other franclal statements. So no additional informatian is shared with (shareholders / suppliars / compesitors), most companies choose the (direct / indirect) method. (Circle al that apply) Q3 Refer to Statersent B above. Net cash from operating activities is (greater / less) shan net income. This difference is primanly due to the adjustment for (depreciation expense / change in accounts receivable) Because most corrpanies report depreciation expense, most companies also report net cash from operating activites as (greater / less) than net inceme Q4 Is it possible to repart a net loss on the income statement and still report a net cash inflow from operafing activities? [Yes/No] Why