Problem:
When considering the direct and indirect method, I believe that the direct method would be the preferred method. The reason is because of the consistency in the data when using this method. Additionally, the FASB also prefers the direct method over the indirect method. What do you believe is the motivation for the two different methods? Some sources point out that the indirect method is cheaper, which I believe is the reason companies prefer it since "Time is Money", but since both methods achieve the same result, what is the point in having two methods? Do you believe this came about when companies were trying to "adjust" the numbers? Or for some other reason? Briefly explain please.