The Direct Method of Preparing the Statement of Cash Flows

question 56

Multiple Choice

The direct method of preparing the statement of cash flows:

• A)is preferred by FASB.
• B)is much easier for companies to compute.
• C)both reports where cash came from and how it was spent on operating activities and is preferred by FASB.
• D)reports where cash came from and how it was spent on operating activities.

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Definitions:

Organogenesis

Organogenesis is the process during embryonic development in which organs are formed from the three primary germ layers: the ectoderm, mesoderm, and endoderm.

Embryonic Development

The process by which an embryo forms and develops, initiating from a single cell and resulting in a fully formed organism through cellular division, differentiation, and morphogenesis.

Three-Layered Embryo

Also known as the gastrula, it refers to an early stage in embryonic development where the embryo consists of three primary layers: ectoderm, mesoderm, and endoderm.

Organogenesis

The phase during embryonic development when the ectoderm, endoderm, and mesoderm develop into the internal organs of the organism.