The Cash Flow from Operating Activities Is Calculated in the Same

question 126

True/False

The cash flow from operating activities is calculated in the same way, whether the company uses the direct or the indirect method of preparing the statement of cash flow. The only difference is the way the financing activities section is prepared.

---

Definitions:

Input

Resources used in the production process of goods and services, including raw materials, labor, and capital.

Decreasing Returns

A concept in economics where each additional unit of input results in a progressively smaller increase in output, often observed in production processes.

Marginal Product

The additional output that is produced by using one more unit of a particular input while holding other inputs constant.

Factor

An element or component, such as land, labor, and capital, that is used in the production of goods and services.