The Two Ways to Format the Operating Activities on the Statement

question 2

Multiple Choice

The two ways to format the operating activities on the statement of cash flows are:

• A)direct and indirect methods.
• B)direct and operating methods.
• C)indirect and net worth methods.
• D)direct and net income methods.

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Definitions:

Billable Hour

A unit of measure used to charge clients for services, representing one hour of work provided by a company or professional.

Accounting Standards

A set of principles and rules that define how financial transactions and statements should be recorded and reported.

Cost of Inventories

The total value of all the components that make up inventory, including materials, labor, and allocated overhead.

Fixed and Variable

Terms referring to costs within a business, where fixed costs do not change with the level of production or sales, while variable costs vary directly with the level of production.