In Order to Determine Net Cash Provided by Operating Activities

question 144

Multiple Choice

In order to determine net cash provided by operating activities, a company must convert net income from an accrual basis to a cash basis under

• A)the direct method only.
• B)the indirect method only.
• C)both the direct method and the indirect method.
• D)neither the direct nor the indirect method.

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Definitions:

Acceptance of Goods

The act of confirming that the goods received are as per the contract terms, generally marking the completion of a seller's performance obligations.

Scan Function

A process of systematically examining or reviewing a set of data, documents, or systems to identify specific information or characteristics.

CD Player

A device that plays audio compact discs, capable of reading digital audio data and converting it into sound.

Revoke Acceptance

The right of a buyer to cancel acceptance of goods received if they substantially fail to conform to the contract, under certain conditions.