The Direct Approach Differs from the Indirect Approach with Regard

question 12

Multiple Choice

The direct approach differs from the indirect approach with regard to preparing which section of the Statement of Cash Flows?

• A)Operating activities
• B)Investing activities
• C)Financing activities
• D)There is no difference between the two approaches.

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Definitions:

Journal Entry

A record in the accounting journal that represents a single transaction and shows the debits and credits to the various accounts affected by the transaction.

Quoted Price

The existing rate at which an asset or service can be sold or purchased.

Selling Price

The amount of money for which a product or service is sold to customers.

Face Value

The original cost of a bond or the principal balance to be paid back at maturity, excluding interest.