Which of the Following Statements Is True of the Direct

question 18

Multiple Choice

Which of the following statements is true of the direct and indirect methods of preparing the statement of cash flows?

• A)The indirect method and the direct method will produce the same amount of net cash flow from operating activities.
• B)The investing activities section is the only section that differs between the direct and indirect methods.
• C)The indirect method shows three types of cash flows,but the direct method does not.
• D)There is no difference in the way the operating activities section is presented.

---

Definitions:

Imitation

The action of using someone or something as a model and attempting to replicate their behavior, strategy, or design.

R&D Expenditures

Financial investments made in the research and development sector, aimed at fostering innovation, creating new products, improving existing products, or discovering new technologies.

Expected Rate of Return

The predicted yield that an investment will generate over a specified period, taking into account both the probability of gains and the possibility of losses.

Economic Efficiency

A broader term that occurs when all resources are allocated optimally to serve each individual or entity in the best way while minimizing waste and inefficiency.