Which Sections of the Cash Flow Statement Are Affected by the Difference

question 18

Multiple Choice

Which sections of the cash flow statement are affected by the difference in the direct and indirect approaches of presenting a cash flow statement?
I.Operating activities section
II.Investing activities section
III.Financing activities section

• A)I
• B)II
• C)III
• D)I,II,and III

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Definitions:

Unearned Revenues

Money received by a business for services or goods not yet delivered or rendered to the customer.

Profit Margin

A financial metric that measures the amount by which revenue from sales exceeds costs in a business, expressed as a percentage of revenue.

Periodic Reporting

The process of preparing and presenting financial statements at regular intervals, typically quarterly or annually.

Time Period Assumption

An accounting principle that allows the business activities to be divided into artificial time periods for financial reporting.