Editing Cash flow statement (section)

===Direct method===
The direct method for creating a cash flow statement reports major classes of gross cash receipts and payments. Under IAS 7, dividends received may be reported under operating activities or under investing activities. If taxes paid are directly linked to operating activities, they are reported under operating activities; if the taxes are directly linked to investing activities or financing activities, they are reported under investing or financing activities. Generally Accepted Accounting Principles (GAAP) vary from International Financial Reporting Standards in that under GAAP rules, dividends received from a company's investing activities is reported as an "operating activity," not an "investing activity."<ref>{{cite web|url=http://smallbusiness.chron.com/operating-activity-dividends-gaap-38254.html|title=Operating Activity on Dividends in GAAP|website=chron.com|date=16 January 2012 |access-date=16 March 2018}}</ref>

'''Sample cash flow statement using the direct method'''<ref>Epstein, p. 101</ref>
{| class="wikitable"
|-
|colspan="5"|'''Cash flows from (used in) operating activities'''
|-
| &nbsp;&nbsp;Cash receipts from customers
| align="right"|9,500
|
|-
| &nbsp;&nbsp;Cash paid to suppliers and employees
| align="right"|(2,000)
|
|-
| &nbsp;&nbsp;Cash generated from operations ('''sum''')
| align="right"|'''7,500'''
|
|-
| &nbsp;&nbsp;Interest paid
| align="right"|(2,000)
|
|-
| &nbsp;&nbsp;Income taxes paid
| align="right"|(3,000)
|
|-
| &nbsp;&nbsp;Net cash flows from operating activities
|
| align="right"|2,500
|-
|colspan="3"|'''Cash flows from (used in) investing activities'''
|-
| &nbsp;&nbsp;Proceeds from the sale of equipment
| align="right"|7,500
|
|-
| &nbsp;&nbsp;Dividends received
| align="right"|3,000
|
|-
| &nbsp;&nbsp;Net cash flows from investing activities
|
| align="right"|10,500
|-
|colspan="3"|'''Cash flows from (used in) financing activities'''
|-
| &nbsp;&nbsp;Dividends paid
| align="right"|(2,500)
|
|-
| &nbsp;&nbsp;Net cash flows used in financing activities
|
| align="right"|(2,500)
|-
| colspan="3"|.
|-
| Net increase in cash and cash equivalents
|
| align="right"|10,500
|-
| Cash and cash equivalents, beginning of year
|
| align="right"|1,000
|-
| Cash and cash equivalents, end of year
|
| align="right"|$11,500
|}