Please Define the Following Key Terms

question 33

Essay

Please define the following key terms. Show Who? What? Where? When? Why Important?
-Saint Benedict

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Definitions:

Direct Method

An approach to preparing the cash flow statement where actual cash flows from operating activities are disclosed, as opposed to the indirect method which adjusts net income for non-cash transactions.

Operating Activities

Activities related to the core business functions of a company, including production, sales, and delivery of services, as reflected in its cash flow.

Accrual Basis

An accounting method where revenue and expenses are recorded when they are earned or incurred, regardless of when cash transactions occur.

Cash Basis

An accounting method where revenues and expenses are recognized only when cash is received or paid.