A Company Uses the Direct Method of Preparing the Statement

question 28

Multiple Choice

A company uses the direct method of preparing the statement of cash flows. Current year depreciation expense can be found on the

• A)balance sheet and income statement.
• B)income statement and statement of cash flows.
• C)income statement only.
• D)statement of cash flows only.

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Definitions:

Receivables

Amounts owed to a company by its customers for goods or services delivered on credit.

Control Activity

Measures implemented to ensure that management's directives are carried out, aiming to prevent, detect, and correct financial misstatements or fraud.

Extensive Marketing Plan

A comprehensive strategy outlining marketing efforts, targeting how a business will effectively engage customers, compete in the market, and achieve its marketing goals.

Segregation Of Duties

An internal control method used to prevent fraud and errors, which involves dividing tasks and responsibilities among different people to ensure no single individual controls all aspects of a transaction.