In Order to Determine Net Cash Provided by Operating Activities

question 144

Multiple Choice

In order to determine net cash provided by operating activities, a company must convert net income from an accrual basis to a cash basis under

• A)the direct method only.
• B)the indirect method only.
• C)both the direct method and the indirect method.
• D)neither the direct nor the indirect method.

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Definitions:

Patent Amortization

The gradual write-off of the cost of a patent over its useful life to reflect its consumption, expiration, or decline in value.

Franchise Acquisition

The process of acquiring the rights to operate a business under an established company's brand and system.

Research And Development

Activities related to the innovation, improvement, or development of products or processes.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in a linear fashion.