The GAAP Only Authorizes the Use of the Indirect Method

question 33

True/False

The GAAP only authorizes the use of the indirect method for preparation of the consolidated cash flow statement.

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Definitions:

Peer Group

A set of companies or individuals used as a point of reference for performance comparison or benchmarking.

Cash Ratio

A liquidity ratio that measures a company's ability to pay off short-term liabilities with cash and cash equivalents, providing insight into its immediate financial health.

Statement Of Cash Flows

The Statement of Cash Flows is a financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents, breaking the analysis down to operating, investing, and financing activities.

Current Assets

Short-term financial resources that a company expects to turn into cash within one year.