The Indirect Method for the Preparation of the Operating Activities

question 52

Multiple Choice

The indirect method for the preparation of the operating activities section of the statement of cash flows:

• A)Separately lists each major item of operating cash receipts.
• B)Separately lists each major item of operating cash payments.
• C)Reports net income and then adjusts it for items necessary to determine net cash provided or used by operating activities.
• D)Is required if the company is a merchandiser.
• E)Must not be used in all circumstances.

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Definitions:

Barbarian Invaders

Groups or tribes that invaded the territories of the Roman Empire during its decline, contributing to its fall.

Visigoths

A Germanic tribe that played a significant role in the fall of the Western Roman Empire and established a kingdom in what is now Spain and Portugal.

Ebbo Gospels

An illuminated Gospel book from the 9th century, notable for its expressive and emotional style of art, associated with the Carolingian Renaissance.

Utrecht Psalter

A highly important and richly illustrated Carolingian manuscript from the 9th century, known for its unique pen and ink drawings.