The Direct Method for the Preparation of the Operating Activities

question 214

Multiple Choice

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

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

---

Definitions:

Civilian Casualties

Non-military individuals who are injured or killed in a conflict or in a tragic event.

Arms Race

a competition between nations for superiority in the development and accumulation of weapons, especially between the Cold War superpowers.

Trade Territory

A geographic area where a company or country has exclusive rights or advantages for conducting commercial activities.

Neutral Belgium

Refers to Belgium's policy of neutrality before and during parts of both World War I and World War II, attempting to avoid entanglement in the conflicts of its larger neighbors.