The Two Approaches of Reporting Cash Flows Provided by Operating

question 138

Multiple Choice

The two approaches of reporting cash flows provided by operating activities are the

• A)direct and indirect methods.
• B)basic and standard methods.
• C)gross margin and contribution margin methods.
• D)liquidity and profitability methods.

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Definitions:

Maturity Value

The total amount payable to the holder of a financial instrument at its maturity date, including principal and any accrued interest.

360-Day Year

An accounting convention that simplifies interest calculation by assuming all months have 30 days.

Maturity Date

The date on which the principal amount of a loan, bond, or other financial instrument becomes due and payable.

Leap Years

Years that include an extra day (February 29) to keep the calendar year synchronized with the astronomical year.