The Direct Method for the Preparation of the Operating Activities

question 155

Multiple Choice

The direct 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 and cash payments.
• B)Reports adjustments to reconcile net income to net cash provided or used by operating activities in the statement.
• C)Reports a different amount of cash flows from operations than if the indirect method is used.
• D)Is required if the company is a merchandiser.
• E)Is required by the FASB.

---

Definitions:

Self-Actualization

The motivation to develop one’s full potential as a human being—the highest and most elusive of Maslow’s proposed needs.

Esteem

A social psychological construct representing an individual’s overall subjective emotional evaluation of their own worth.

Belongingness

A human emotional need to be an accepted member of a group, whether it is friends, family, or co-workers.

Competence

The ability to do something successfully or efficiently, often referring to a specific skill or set of skills.