When a Company Uses the Direct Method to Determine the Cash

question 31

Multiple Choice

When a company uses the direct method to determine the cash flows from operating activities, cash flows from operating activities will:

• A) be identical to the amount reported using the indirect method.
• B) be larger if there is a net cash inflow and smaller if there is a net cash outflow compared to the amount reported using the indirect method.
• C) always be larger than the amount reported using the indirect method.
• D) be larger if there is a net cash outflow and smaller if there is a net cash inflow compared to the amount reported using the indirect methoD.
• The direct method and the indirect method produce the same result for net cash provided by or used in operating activities.

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Definitions:

Biodiversity Hotspot

A biogeographic region with a significant reservoir of biodiversity that is under threat from humans.

In Situ Conservation

The preservation of species within their natural habitats as a conservation strategy, in contrast to ex-situ efforts like zoos or seed banks.

In Situ Conservation

The conservation of genetic resources in natural populations of plant or animal species, such as the conservation of forest genetic resources in natural populations of tree species.

Ex Situ Conservation

The practice of preserving endangered species by removing part of the population from its natural habitat and maintaining it in controlled conditions.