The Direct Method for the Preparation of the Operating Activities

question 149

Multiple Choice

The direct method for the preparation of the operating activities section of the statement of cash flows:

• A)Separately lists each major item of operating cash receipts and cash payments.
• B)Reports adjustments to reconcile net income to net cash provided or used by operating activities in the statement.
• C)Reports an amount of cash flows from operations different from the amount determined using the indirect method.
• D)Is required if the company is a merchandiser.
• E)Is required by the FASB.

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Definitions:

Rebates

A return of part of the original payment for some service or merchandise, often used as a promotion technique to increase sales.

Skateboarding Events

Organized competitions or exhibitions where skateboarders showcase their skills in various disciplines, such as street, vert, and park.

Old Spice High Endurance

A line of personal care products offered by Old Spice, designed to provide long-lasting fragrance and protection.

Sales Promotion

Short-term marketing strategies designed to stimulate quicker or greater purchase of products or services by consumers or traders.