Which Method of Preparing the Operating Activities Section of a Statement

question 79

Multiple Choice

Which method of preparing the operating activities section of a statement of cash flows adjusts net income to remove the effects of deferrals and accruals for revenues and expenses?

• A)the direct method
• B)the indirect method
• C)Both the direct and indirect methods.
• D)Neither the direct method nor the indirect method.

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Definitions:

Fatty Substance

Any of various natural oily or greasy substances occurring in plants and animals, used by the body for energy, heat, and as a component of cell membranes.

Cerebrum

The largest part of the brain, responsible for voluntary motor functions, sensory information processing, language, cognitive abilities, and emotional regulation.

Hemispheres

The two halves of the brain (right and left) that control different functions and processes in the human body.

Controls

Variables that are kept constant or monitored in order to assess the effect of experimental treatments in scientific studies.