The Difference Between the Indirect and Direct Methods of Preparing

question 119

Multiple Choice

The difference between the indirect and direct methods of preparing a statement of cash flows is reflected in the:

• A) manufacturing activities section.
• B) investing activities section.
• C) operating activities section.
• D) selling activities section.

---

Definitions:

Consideration

In contract law, consideration refers to something of value, which can be an object, service, money, or promise, exchanged between parties as the basis for a contract.

Bilateral Contract

An agreement between two parties in which each party commits to performing a specific obligation.

Consideration

In a contractual agreement, it is the value or promise that each party agrees to exchange.

Promissory Estoppel

A legal principle that enables a party to recover on a promise made when they have reasonably relied on that promise to their detriment, even if a formal contract does not exist.