Which of the Following Statements Is True of the Direct

question 52

Multiple Choice

Which of the following statements is true of the direct and indirect methods of preparing the statement of cash flows?

• A)The indirect method and the direct method will produce the same amount of net cash flow from operating activities.
• B)The direct method begins with Net Income and adjusts to calculate operating and investing cash flows.
• C)The indirect method shows three types of cash flows, but the direct method does not.
• D)The operating activities section of both the direct and the indirect methods are the same.

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Definitions:

Performance Advantage

The superior capability or efficiency demonstrated by an individual or system in executing a task compared to others.

Research Methods

Various strategies, techniques, and tools used to investigate questions and hypotheses in the scientific field.

Empirical Data

Information acquired by observation or experimentation that is used as a basis for knowledge creation or validation.

Scientific Method

The scientific method is a systematic process for conducting research and experimentation, involving observation, hypothesis formulation, experimentation, and conclusion to test scientific theories.