The Direct Method of Preparing the Statement of Cash Flows

question 78

Multiple Choice

The direct method of preparing the statement of cash flows

• A)is preferred by IASB and FASB.
• B)is the same as the indirect method with the exception of the cash account.
• C)is an accumulation of net income accounts so that accountants can locate discrepancies in balances.
• D)omits the financing section of the statement.
• E)focuses on cash outflows over cash inflows.

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Definitions:

Equilibrium Wage

The salary level where the demand for labor from employers matches the supply of labor from workers.

Productivity

A measure of the efficiency of production, often quantified as the ratio of outputs to inputs in a production process.

Human Capital

The competencies, insights, and background that an individual or community has, assessed based on their economic value or cost to an organization or country.

Experience

The knowledge or skill obtained from involvement in or exposure to events, activities, or specific fields of work or study.