Which of the Following Statements Regarding the Reporting of Operating

question 83

Multiple Choice

Which of the following statements regarding the reporting of operating cash flows using the direct method is true?

• A) The Financial Accounting Standards Board (FASB) prefers the direct method of accounting for cash flows from operating activities.
• B) The FASB prefers the indirect method of calculating cash flows fro m operations because it gives a more accurate calculation of cash provided by operating activities.
• C) The direct method results in a larger amount of cash flow from operating activities than does the indirect method.
• D) The direct and indirect methods use different presentations for cash flows from investing and financing activities.

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Definitions:

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A tool or method used to assess the degree of truthfulness and integrity in an individual's responses or actions.

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