Under the Indirect Method of Preparing the Operating Section of the Statement

question 104

Multiple Choice

Under the indirect method of preparing the operating section of the statement of cash flows,net cash provided by operating activities is $207,000.If the direct method of preparing the operating section of the statement of cash flows was used:

• A)net cash provided by operating activities would be the same,$207,000.
• B)net cash provided by operating activities would be more than $207,000.
• C)net cash provided by operating activities would be less than $207,000.
• D)net cash provided by financing and investing activities would equal $207,000.

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Definitions:

Accrued Liabilities

Liabilities that have been incurred but not yet paid or recorded in the financial statements.

Cash Flows

The movement of money into and out of a business, reflecting the company's operational, investing, and financing activities.

Net Worth

The total assets minus total liabilities of an individual or company, representing the owner's equity.

Financing Activities

Transactions related to funding the company, including issuing equity, borrowing loans, or paying dividends.