The Direct Method of Reporting Operating Cash Flows

question 39

Multiple Choice

The direct method of reporting operating cash flows:

• A) Is considered supplementary disclosure.
• B) Is not recommended by the FASB, but is commonly used.
• C) Is used by most companies.
• D) Must be used by all companies.
• E) Is recommended but not required by the FASB.

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Definitions:

RSC System

Roll Stability Control system, an active safety feature designed to help prevent vehicle rollover by adjusting engine power and applying brakes to specific wheels.

Chassis Data Bus

A network within a vehicle that allows for the transfer of data between electronic control units and devices.

Driveline Retarder

A device used to reduce the speed of a vehicle by applying resistance to the driveline, aiding in braking.

Suspension Problems

Issues or failures within a vehicle's suspension system, which can affect handling, comfort, and safety by impairing the system's ability to absorb and isolate road shocks.