Which of the Following Is Not True of the Direct

question 78

Multiple Choice

Which of the following is not true of the direct method of preparing a statement of cash flows?

• A) It has a different net cash inflow (outflow) from operating activities than the indirect method.
• B) It reports the same net increase or decrease in cash as the indirect method.
• C) It gives the user a sense of the magnitude of gross dollars flowing in and out of the company.
• D) It has the same cash flows from investing and financing activities as the indirect method.

---

Definitions:

Drive

An innate, biologically determined urge to attain a goal or satisfy a need.

Delay Gratification

The ability to resist the temptation for an immediate reward and wait for a later, often greater reward.

Delay Gratification

The capacity to withstand the urge for an instant gratification in favor of a future reward.

Immediate Reward

A reward received directly after completing a task or activity, often motivating future behavior.