A Bank That Handles Consumer Loans in One Department and Commercial

question 166

True/False

A bank that handles consumer loans in one department and commercial loans in another department is using product departmentalization.

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Definitions:

Indirect Method

A way of calculating cash flows for operational activities by starting with net income and adjusting for non-cash transactions.

Net Income

The total profit of a company after all expenses, including taxes and interest, have been deducted from revenues.

Direct Method

A method of preparing the cash flow statement where actual cash flow information from the company’s operations segment is used directly.

Indirect Method

A way of calculating cash flows from operating activities for the cash flow statement by adjusting net income for changes in non-cash items.