The Direct Approach Differs from the Indirect Approach with Regard

question 12

Multiple Choice

The direct approach differs from the indirect approach with regard to preparing which section of the Statement of Cash Flows?

• A)Operating activities
• B)Investing activities
• C)Financing activities
• D)There is no difference between the two approaches.

---

Definitions:

External Benefits

Benefits resulting from a transaction that affect parties not directly involved in the transaction, often leading to positive outcomes for society.

External Costs

Costs of a transaction or activity that affect third parties who did not choose to incur that cost, often seen in environmental pollution.

Competitive Market

A market structure characterized by a large number of buyers and sellers, free entry and exit, and a product for which there are many substitutes.

External Benefit

A benefit that people other than the consumer or producer enjoy, resulting from a transaction or activity.