Which of the Following Statements Is Incorrect Regarding Preparing a Statement

question 140

Multiple Choice

Which of the following statements is incorrect regarding preparing a statement of cash flows using the direct method?

• A) The direct method shows adjustments to net income.
• B) The direct method shows the specific sources and uses of cash that are associated with operating activities.
• C) Noncash expenses, gains, and losses are not used in the determination of net cash flow from operating activities.
• D) A majority of companies use the indirect method rather than the direct method.

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Definitions:

Unemployment Rate

The rate of unemployment among those actively seeking work within the labor force.

Labor Data for Tajnia

Statistical information related to the workforce, employment trends, and economic conditions within Tajnia.

Adults Employed

The portion of the adult population that is currently employed and working.

Adults Unemployed

Individuals who are of working age, not currently employed, and actively seeking employment but unable to find work.