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The statement of cash flows

3.4 Direct method

The direct method provides more detailed information and is based upon cash flow
information extracted directly from the accounting records. As this method discloses
information that would otherwise remain confidential, most companies do not use the
direct method. This could be examined in BA3 in conjunction with incomplete records
to find the information required in presentation of the direct method.
$
Cash received from customers (W1) X
Cash payments to suppliers (W2) (X)
Cash paid to and on behalf of employees (W3) (X)
——
Cash inflow from operations X

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