The Direct Method of Reporting Operating Cash Flows

question 39

Multiple Choice

The direct method of reporting operating cash flows:

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

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Definitions:

Phrenic

Pertaining to the diaphragm, such as the phrenic nerve which controls the diaphragm muscle, thus playing a vital role in the breathing process.

Brachial Plexus

A network of nerve fibers that runs from the spine, through the neck, to the axilla, and innervates the upper limb.

Sacral Plexus

A network of nerves originating from the lower back, which supplies nerves to the pelvis, buttocks, and the posterior part of the thigh.

Lumbar Plexus

A network of nerve fibers in the lumbar region of the body, providing sensation and movement.