When a company uses the direct method to determine the cash flows from operating activities, cash flows from operating activities will:
A. always be larger than the amount reported using the indirect method.
B. be identical to the amount reported using the indirect method.
C. be larger if there is a net cash outflow and smaller if there is a net cash inflow compared to the amount reported using the indirect method.
D. be larger if there is a net cash inflow and smaller if there is a net cash outflow compared to the amount reported using the indirect method.
Answer: B
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