A Company Calculates Its Cash Flows from Operating Activities as Profit

question 16

Multiple Choice

A company calculates its cash flows from operating activities as profit +/- accruals.This is:

• A) the direct method.
• B) the indirect method.
• C) neither the direct or the indirect method.
• D) none of the above.

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Definitions:

Ethanol

A volatile, flammable, colorless liquid alcohol used as a fuel additive and in alcoholic beverages.

Government

The organization or system through which a community, state, or nation is governed and regulatory policies are implemented.

Subsidizes

Financial aid supplied by the government to an industry or business so that the price of a commodity or service may remain low or competitive.

Steel

A hard, strong alloy made primarily of iron and carbon, used extensively in construction and manufacturing.