Which of the Following Statements About the Cash Flow Statement

question 2

Multiple Choice

Which of the following statements about the cash flow statement is TRUE?

• A)The operating activities section of both the direct and the indirect method is the same.
• B)The indirect method and the direct method will both show the same end results.
• C)The direct method begins with profit and adjusts to calculate operating cash flows.
• D)The indirect method shows three types of cash flows but the direct method does not.

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Definitions:

Electronic Funds Transfer (EFT)

The electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, through computer-based systems.

Proximately Caused

The action that directly leads to a specific effect or outcome, establishing a clear causal link in legal responsibility.

ATM

An Automated Teller Machine that allows bank customers to perform financial transactions, such as withdrawals and deposits, electronically without a human teller.

Payor Bank

The bank that is responsible for paying the check or draft as specified by the person making the payment.