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.

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Definitions:

IR Spectroscopy

An analytical technique that uses infrared light to study the vibrational and rotational movements of molecules, revealing structural and functional group information.

Pentane

A hydrocarbon compound with the molecular formula C5H12, consisting of five carbon atoms linked in a single chain.

Heptane

A straight-chain alkane with the formula C7H16, commonly used as a nonpolar solvent in laboratories.

IR Spectrum

An infrared spectrum, a graph displaying the absorption of infrared radiation by a substance at different frequencies, useful in identifying molecular structures.