Activity Models Are a Relatively New Process Modeling Tool

question 49

True/False

Activity models are a relatively new process modeling tool.

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Definitions:

Indirect Method

A way of calculating cash flows from operating activities by starting with net income and adjusting for changes in non-cash accounts on the balance sheet.

Merchandise Inventories

Goods, either manufactured or purchased, held for sale in the regular course of business.

Direct Method

A cash flow statement approach that itemizes actual cash flows from operating activities, rather than adjusting net income.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting its decrease in value over time.