Which Method of Preparing the Operating Activities Section of the Statement

question 25

Multiple Choice

Which method of preparing the operating activities section of the statement of cash flows adjusts net income to remove the effects of deferrals and accruals for revenues and expenses?

• A) the direct method
• B) the indirect method
• C) both direct and indirect methods
• D) neither the direct method nor the indirect method

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Definitions:

Organizational Strategy

A planned course of action designed to achieve the long-term goals and objectives of an organization.

Negative Consequences

Undesirable outcomes that result from an action or lack thereof.

Needs Analysis Process

A systematic approach to identifying and assessing the training requirements of an organization or individuals.

Andragogy Analysis

The study or examination of adult learning strategies, focusing on the process of engaging mature learners.