When the Operating Activities Section of the Statement of Cash

question 108

Multiple Choice

When the operating activities section of the statement of cash flows is reported using the direct method,the FASB requires:

• A)The preparation of the statement of cash flows under the indirect method be completed and reported with the statement of cash flows prepared using the direct method.
• B)A reconciliation of net income to net cash provided or used by operating activities.
• C)Footnotes to the financial statements disclosing the difference between net income and the cash provided or used by financing activities.
• D)The income statement to be prepared under the cash basis of accounting.
• E)Noncash investing and financing activities be included in the statement of cash flows.

---

Definitions:

Homo Habilis

"Handy human." The first fossil members of the genus Homo appearing 2.5 million years ago, with larger brains and smaller faces than australopithecines.

Homo Habilis

An extinct species of early human believed to have lived around 2.1 to 1.5 million years ago, known for using stone tools.

Brain Size

A measure of brain volume or mass that is often related to cognitive abilities, evolutionary adaptations, and species comparisons.

Hominoids

A term that encompasses all apes and humans, referring to the group of primates that are large-bodied and have no tail.