Which of the Following Is True About the IASB Standards

question 10

Multiple Choice

Which of the following is true about the IASB standards on Cash Flow Statements?

• A)Cash flow statements are not required under the IASB standards.
• B)Operating cash flows must be determined using the "direct method."
• C)Operating cash flows may be combined with financing cash flows.
• D)IAS 7 requires essentially the same information in the cash flow statement as U.S.GAAP.

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Definitions:

Sales on Account

Transactions where goods or services are sold and payment is deferred to a future date, typically recorded as accounts receivable.

Accounts Receivable

Money owed to a business by its customers for goods or services delivered or used but not yet paid for.

Operating Cycle

The duration between the acquisition of inventory and the collection of cash from receivables, indicating the time needed to sell inventory and collect cash.

Inventory

The cumulative quantity of products and materials in a company's possession intended for either direct sale or use in manufacturing.