Question

Santiago Incorporated has a constructing company in which he does major constructing jobs and also leases his heavy-duty equipment to help supplement his income. His cash account is very important in the running of both of his businesses as he uses the accrual basis of accounting . What method would you suggest that Jay Santiago use for recording cash flow from operating activities and why?

Answer 1

"Direct Method" is the right answer.

Step-by-step explanation:

• The direct approach provides a clearer overview of how a company receives currency. And therefore it is regarded as equivalent to the alternative manner.
• Compared to the price of something like the money market account throughout the particular circumstance, the above direct method of registering cash balance somewhat from operations would be advised.