The Direct Method of Reporting Operating Cash Flows

question 12

Multiple Choice

The direct method of reporting operating cash flows:

• A)Is recommended but not required by the FASB.
• B)Must be used by all companies.
• C)Is used by most companies.
• D)Is considered supplementary disclosure.
• E)Is not recommended by the FASB,but is commonly used.

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Definitions:

Securities Laws

Regulations and laws that govern the sale, purchase, and issuance of securities, aimed at protecting investors and ensuring fair and efficient markets.

1933 Act

The Securities Act of 1933, a U.S. law aimed at ensuring more transparency in financial statements so investors can make informed decisions about securities investments.

Regulatory Components

Elements or aspects of laws, regulations, or guidelines that impact how businesses and individuals must conduct themselves.

Registration Provisions

Legal requirements for the recording or listing of an item, transaction, or entity with a designated authority to make it legally recognizable and/or to regulate it.