Explain the difference between the indirect and direct method of the statement of cash flows.

Describe whether all three sections of the cash flow statement are different when using either method.

Describe which method is preferred by the FASB.

Describe how are the following calculated when preparing the cash flow statement using the direct method:

oCash collected from customers,

oCash paid for merchandise,

oCash paid to employees and cash paid for other accrued expenses, and

Cash paid for other operating costs including insurance and other prepaid expenses