Which Method of Preparing the Operating Activities Section of a Statement

question 149

Multiple Choice

Which method of preparing the Operating Activities section of a statement of cash flows adjusts net income to remove the effects of deferrals and accruals for revenues and expenses?

• A)The direct method
• B)The indirect method
• C)Both the direct and indirect methods
• D)Neither the direct method nor the indirect method

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Definitions:

Norms

Shared expectations or rules within a social group that guide behavior and indicate what is considered appropriate or acceptable.

Society

A community of people living together in a more or less organized way, establishing norms and institutions that define the collective social behavior.

Executive Control Centre

A component of the brain responsible for regulating attention, problem-solving, and adaptable behavior in complex situations.

Prefrontal Cortex

The frontal part of the brain involved in complex behaviors such as planning, decision making, and moderating social behavior.