Which Method of Preparing the Operating Activities Section of the Statement

question 25

Multiple Choice

Which method of preparing the operating activities section of the statement of cash flows adjusts net income to remove the effects of deferrals and accruals for revenues and expenses?

• A) the direct method
• B) the indirect method
• C) both direct and indirect methods
• D) neither the direct method nor the indirect method

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Definitions:

Differentiated Needs

Distinct and specific requirements of customers or markets that businesses aim to fulfill with customized products or services.

Customizing Products

The process of modifying or tailoring products and services to meet specific customer preferences or requirements.

Human Capital

The skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to organizations.

Strategic Objectives

Long-term goals that an organization seeks to achieve to fulfill its mission and vision.