The Direct Method for the Preparation of the Operating Activities

question 214

Multiple Choice

The direct method for the preparation of the operating activities section of the statement of cash flows:

• A) Reports adjustments to reconcile net income to net cash provided or used by operating activities in the statement.
• B) Is required by the FASB.
• C) Reports a different amount of cash flows from operations than if the indirect method is used.
• D) Separately lists each major item of operating cash receipts and cash payments.
• E) Is required if the company is a merchandiser.

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Definitions:

Filtration Rate

A measurement of the volume of fluid that passes through a filter or a membrane within a specified time period.

Distal Convoluted Tubule

A portion of the kidney nephron that plays a role in the reabsorption of water and ions from the filtrate, contributing to the regulation of blood pressure, pH, and electrolyte balance.

Loop Of Henle

A U-shaped tube in the kidney nephron essential for concentrating urine and conserving water by creating an osmotic gradient in the medulla.

Glomerulus

A network of small blood vessels located in the kidney that performs the first step of filtering blood to form urine.