Under the Direct Method of Preparing the Financing Section of the Statement

question 3

Multiple Choice

Under the direct method of preparing the financing section of the statement of cash flows, net cash provided by financing activities is $388,000. If the indirect method of preparing the financing section of the statement of cash flows was used:

• A) cash provided by financing activities would be less than $388,000.
• B) cash provided by financing activities would be more than $388,000.
• C) cash provided by financing activities would be the same, $388,000.
• D) cash provided by operating activities would equal $388,000.

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Definitions:

Job Analysis

The process of gathering, documenting, and analyzing information about job tasks, responsibilities, and the required skills, knowledge, and abilities for a specific role.

Midpoint Method

A technique for calculating the percent change in which changes in a variable are compared with the average, or midpoint, of the starting and final values.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, reflecting the sensitivity of consumers to price changes.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a specific price level, at a given time.