The Indirect Method for the Preparation of the Operating Activities

question 24

Multiple Choice

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

• A) Separately lists each major item of operating cash payments.
• B) Is required if the company is a merchandiser.
• C) Must not be used in all circumstances.
• D) Separately lists each major item of operating cash receipts.
• E) Reports net income and then adjusts it for items necessary to determine net cash provided or used by operating activities.

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Definitions:

Sales Tactics

Strategies or methods employed to convince prospects or customers to buy a product or service, often involving persuasion and negotiation techniques.

Conventional

Traditional, typical, or standard practices, methods, or techniques.

Marketing Channel

A set of practices or activities necessary to transfer the ownership of goods, and to move goods, from the point of production to the point of consumption.

Cooperative

An organization owned and operated for the benefit of those using its services, where members work together for a common goal, sharing in decisions and profits.