In Developing the Cash Flows from Operating Activities Most Companies

question 158

Multiple Choice

In developing the cash flows from operating activities most companies in the U. S.

• A) use the direct method.
• B) use the indirect method.
• C) present both the indirect and direct methods in their financial reports.
• D) prepare the operating activities section on the accrual basis.

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Definitions:

Inventory Levels

The quantity of goods or materials on hand at any given time, a crucial component in supply chain and inventory management.

Aggregate Planning

A marketing activity that attempts to balance supply and demand by determining the best level of production for a given time period.

Overtime

The extra time worked beyond the normal working hours, usually compensated at a higher pay rate.

Stockouts

Situations where demand cannot be met due to inadequate inventory, leading to missed sales opportunities and potentially dissatisfied customers.