When a Company Uses the Direct Method to Determine the Cash

question 5

Multiple Choice

When a company uses the direct method to determine the cash flows from operating activities,cash flows from operating activities will:

• A)be identical to the amount reported using the indirect method.
• B)be larger if there is a net cash inflow and smaller if there is a net cash outflow compared to the amount reported using the indirect method.
• C)always be larger than the amount reported using the indirect method.
• D)be larger if there is a net cash outflow and smaller if there is a net cash inflow compared to the amount reported using the indirect method.

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Definitions:

SWOT Analysis

A strategic planning tool used to identify and understand the Strengths, Weaknesses, Opportunities, and Threats related to business competition or project planning.

Strengths

Characteristics of a business or individual that provide a competitive advantage or contribute positively to achieving objectives.

Weaknesses

Refers to the areas or aspects where an individual, organization, or system lacks strength or proficiency.

Cross-Functional Teams

Groups composed of members from different areas of expertise working together towards a common goal.