The Indirect Method for the Preparation of the Operating Activities

question 52

Multiple Choice

The indirect method for the preparation of the operating activities section of the statement of cash flows:

• A)Separately lists each major item of operating cash receipts.
• B)Separately lists each major item of operating cash payments.
• C)Reports net income and then adjusts it for items necessary to determine net cash provided or used by operating activities.
• D)Is required if the company is a merchandiser.
• E)Must not be used in all circumstances.

---

Definitions:

Pareto Optimal

Pareto optimal is a state of allocation of resources in which it is impossible to make any one individual better off without making at least one individual worse off.

Smelted

The process of extracting a metal from its ore by heating and melting, often involving a chemical reduction reaction.

Carload

A shipping term used to indicate the minimum quantity of cargo necessary for goods to be shipped at a carload rate, typically pertaining to rail transport.

Smelted

The process of extracting a metal from its ore by heating and melting.