What Method Does IAS 7 Encourage for the Reporting of Cash

question 48

Multiple Choice

What method does IAS 7 encourage for the reporting of cash flows from operating activities and what does it mean for the presentation of this category in the statement of cash flows?

• A)The derivative method is required.This means that the amounts are presented as increases or decreases in balance sheet working capital accounts.
• B)The indirect method is required.This means that the cash flows are presented as accrual amounts from the operating section of the statement of comprehensive income adjusted for non-cash effects.
• C)The direct method is required.This means that the gross cash flows from operating items are presented.
• D)Either the derivative or the direct method is required.For the derivative method this means that the amounts are presented as increases or decreases in the statement of financial position or for the direct method, this means that the gross cash flows from operating items presented is permitted

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Definitions:

Conduct

The manner in which a person behaves, especially in a particular place or situation.

Standard of Care

The degree of prudence and caution required of an individual who is under a duty of care, measured against what a reasonable person would do in similar circumstances.

Particular Expertise

Particular Expertise refers to specialized knowledge or skill in a specific area, often acquired through education, training, or extensive experience.

Doctor

A professional who is qualified to treat people who are ill, specializing in diagnosing and providing treatments to promote and restore health.