When the Operating Activities Section of the Statement of Cash

question 159

Multiple Choice

When the operating activities section of the statement of cash flows is reported using the direct method,the FASB requires:

• A)The preparation of the statement of cash flows under the indirect method be completed and reported with the statement of cash flows prepared using the direct method
• B)A reconciliation of net income to net cash provided or used by operating activities
• C)Footnotes to the financial statements disclosing the difference between net income and the cash provided or used by financing activities
• D)The income statement to be prepared under the cash basis of accounting
• E)Noncash investing and financing activities must be included in the statement of cash flows

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Definitions:

Oxygen Availability

The presence and accessibility of oxygen in an environment, critical for the respiration processes of aerobic organisms.

Endosperm

Nutritive tissue in the seeds of flowering plants.

Nutrition

The process of providing or obtaining the food necessary for health and growth, including the study of nutrients and how the body utilizes them.

Photosynthesis

The process by which green plants and some other organisms use sunlight to synthesize nutrients from carbon dioxide and water, producing oxygen as a byproduct.