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:

Zoned "Commercial"

A designation given to an area by a local government, indicating that the land is intended for use by businesses to conduct retail, wholesale, service, or other types of commercial activities.

Contaminated Cola

A scenario where a cola or soft drink becomes impure or unsafe for consumption due to the presence of harmful substances.

Audited Financial Statements

Financial reports (income statement, balance sheet, and cash flow statement) of a company that have been reviewed and certified by a certified public accountant (CPA) to ensure accuracy and compliance with accounting standards.

Battery Contamination

The leakage or spilling of harmful substances from batteries, which can cause environmental damage and pose health risks.