Final answer:
The cash flow statements of health care organizations, both private and government-owned, may use the direct or indirect method.
Step-by-step explanation:
The statement is True. Cash flow statements of both private and government-owned health care organizations may use the direct or indirect method.
The direct method involves reporting the actual cash inflows and outflows, such as cash received from patients or cash paid to suppliers, while the indirect method starts with net income and adjusts it for non-cash items and changes in working capital to arrive at the net cash provided by or used in operating activities.
For example, a nonprofit health organization may use the direct method to present its cash flows from providing medical services, while a private hospital or a governmental agency like Health and Social Services may use the indirect method to show the cash flows in their financial statements.