The Method of Reporting Cash Flows from Operating Activities Under

question 60

Multiple Choice

The method of reporting cash flows from operating activities under which revenues and expenses reported on the income statement are adjusted to reflect the amount of cash received or expended for each item is called the

• A) direct method.
• B) indirect method.
• C) combination method.
• D) adjusted method.

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Definitions:

Customers Served

The total number of unique customers who receive services or products from a business during a specific period.

Budgeting Formulas

Mathematical expressions or rules used to plan and control income and expenditure over a specified period.

Actual Results

Refers to the real, achieved outcomes of financial and operational activities within a specific period.

Cost Drivers

Factors that cause the cost of a product or service to change, such as materials, labor, and overhead expenses.