Which Method of Preparing the Operating Activities Section of a Statement

question 76

Multiple Choice

Which method of preparing the operating activities section of a statement of cash flows adjusts net income to remove the effects of deferrals and accruals for revenues and expenses?

• A) The direct method
• B) The indirect method
• C) Both the direct and indirect methods
• D) Neither the direct method nor the indirect method

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Definitions:

Customer Benefit Plan

A strategic outline that identifies and communicates the advantages or value a customer will gain from a product or service.

Value Analysis

A methodical approach to examining the function of goods or services to minimize cost without compromising on quality or performance.

Trial Close

A soft questioning technique used by salespeople during the sales process to gauge a prospect's readiness to buy.

Sales Presentation

A pitch or demonstration given to potential buyers highlighting the benefits and features of a product or service.