The Financial Accounting Standards Board (FASB)has Expressed a Strong Preference

question 79

True/False

The Financial Accounting Standards Board (FASB)has expressed a strong preference for the indirect method,but allows companies to use the direct method in calculating the cash flow from operating activities.

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Definitions:

Upper Cash Limit

The maximum cash balance a company sets to hold on hand, beyond which excess funds are usually invested in short-term securities.

Lockbox Services

Banking services that process payments for companies by collecting and depositing checks into their accounts.

NPV

Net Present Value is a financial measure that computes the variance between the present value of cash inflows and outflows within a specific timeframe.

T-bills Yield

The return on investment for U.S. Treasury bills, being a measure of the interest income earned from holding these government securities.