Corporations Do Not Commonly Use the Direct Method for the Statement

question 151

Multiple Choice

Corporations do not commonly use the direct method for the Statement of Cash Flows because

• A)of the many additional disclosures and schedules that must accompany the statement.
• B)the FASB prefers the indirect method.
• C)the direct method does not follow GAAP.
• D)there are fewer disclosures required under the indirect method.

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Definitions:

Cardiorespiratory Fitness

A measure of the efficiency of the heart, lungs, and vascular system in delivering oxygen to the body during sustained physical activity.

Adenosine Triphosphate

A high-energy molecule found in the cells of all living things, serving as a primary energy carrier.

Energy

The capacity to do work, which in biological systems is derived from the chemical energy stored in foods or from sunlight in photosynthetic organisms.

Muscles

Tissues in the body that can contract, enabling movement and support of bodily functions.