Which Method of Preparing the Statement of Cash Flows Is

question 78

Multiple Choice

Which method of preparing the statement of cash flows is similar to an income statement prepared on a cash basis?

• A)Single-step method
• B)Indirect method
• C)Multiple-step method
• D)Direct method

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Definitions:

Developmental Costs

Expenses associated with the research and development of a company's goods or services before they can be sold commercially.

Credit Account

is a financial arrangement where a borrower receives something of value now and agrees to repay the lender at a later date, often with interest.

Small Business Owner

A proprietor of a business enterprise that typically has a limited number of employees and a relatively low volume of sales.

Trade Credit

A financial arrangement where a buyer can purchase goods on account, paying the supplier at a later date, often used to improve cash flow.