Which Method of Preparing the Statement of Cash Flows Reports

question 77

Multiple Choice

Which method of preparing the statement of cash flows reports all cash payments and cash receipts from operating activities?

• A)Indirect method
• B)Reporting method
• C)Comprehensive method
• D)Direct method

---

Definitions:

Fixed Cost

Costs that do not change with the level of output or sales, such as rent or salaries.

Variable Cost

Expenses that change in proportion to the amount of goods or services produced, like labor and materials.

Diseconomies of Scale

occur when a company or production process becomes less efficient as it scales up, leading to increased average costs per unit.

Minimum Efficient Scale

The smallest level of production at which a firm can achieve the lowest long-term average cost, allowing it to be competitively viable.