Which Statement Is TRUE Regarding the Direct Method of Preparing

question 67

Multiple Choice

Which statement is TRUE regarding the direct method of preparing the statement of cash flows?

• A)Depreciation is a cash payment under operating activities.
• B)Sales on credit is listed under cash receipts in the operating section.
• C)Collections from customers are the cash receipts listed in the operating section.
• D)Proceeds from the issuance of long-term debt is listed as a cash receipt in the operating section.

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Definitions:

Expected Monetary Value

A mathematical method for determining the mean result when future events include both possible and impossible outcomes.

Profiling Machine

A machine used in manufacturing to shape or outline parts or materials according to a predetermined profile, commonly used in metalworking and woodworking.

Capacity Investment

The allocation of resources towards increasing the production or service capabilities of a business.

Favorable Market

A market condition that is advantageous for sellers, characterized by high demand and the ability to sell at higher prices.