Corporations Do Not Commonly Use the Direct Method for the Statement

question 151

Multiple Choice

Corporations do not commonly use the direct method for the Statement of Cash Flows because

• A)of the many additional disclosures and schedules that must accompany the statement.
• B)the FASB prefers the indirect method.
• C)the direct method does not follow GAAP.
• D)there are fewer disclosures required under the indirect method.

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Definitions:

Social Comparison

The process by which individuals assess their own abilities, achievements, and conditions in comparison to others.

Upward Social Comparison

The process by which individuals compare themselves to others who are perceived to be better off or superior in some way.

Downward Social Comparison

Downward social comparison is a process where individuals compare themselves to others who are less well off in order to feel better about their own situation.

Self-Esteem

An individual's subjective evaluation of their own worth, encompassing beliefs and emotions about oneself.