When Preparing the Operating Activities Section of the Statement of Cash

question 21

True/False

When preparing the operating activities section of the statement of cash flows, both FASB and IASB prefer the direct method over the indirect method.

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Definitions:

Static Budget

A financial plan that does not change over the period it covers, even if actual figures deviate from the planned amounts.

Patient-Visits

A metric in healthcare indicating the number of times patients visit a healthcare provider or facility.

Total Variable Cost

The sum of all costs that vary directly with the level of production, including materials and labor.

Planning Budget

A budget created for a specific level of activity, usually projected at the beginning of a planning period as a guide for income, spending, and capital investment decisions.