Which of the Following Is True Concerning the Direct Method

question 54

Multiple Choice

Which of the following is true concerning the direct method of calculating operating cash flows?

• A) does not tie the net income reported on a company's income statement to the net cash provided from operating activities
• B) does not show how the changes in the elements of a company's operating cycle affected its operating cash flows
• C) reports a company's operating cash inflows separately from its operating cash outflows
• D) All of these choices are true concerning the direct method.

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Definitions:

Average Rate of Return

A financial ratio that calculates the expected return on an investment relative to its initial cost.

US Dollar

The official currency of the United States, widely used as a benchmark and reserve currency worldwide.

Investments

Assets or items acquired with the goal of generating income or appreciation in value.

Exchange Rate

The value of one currency for the purpose of conversion to another, crucial for international trade and investments.