Most Public Companies Use the Indirect Method to Prepare Their

question 176

True/False

Most public companies use the indirect method to prepare their statement of cash flows because it is the method the FASB prefers.

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Definitions:

Rival Good

A type of good that cannot be consumed by more than one person at the same time, because its consumption by one person reduces its availability for others.

Marginal External Cost

The additional cost to society that arises from one more unit of a good being produced, not considered by the producer.

Optimal Fee

The best possible charge for a service or product that maximizes profit without discouraging consumers from buying.

Profitability

The degree to which a business or activity yields profit or financial gain.