Which of the Following Statements Is Not Correct

question 9

Multiple Choice

Which of the following statements is not correct?

• A) The direct method presents receipt and payment flows separately for each category of operating activities: selling,purchasing,securing employees labor,etc.
• B) The direct method provides information which may be useful in estimating future cash flows and which is not available under the indirect method but is difficult to implement.
• C) The vast majority of businesses report cash flows from operating activities using the indirect method.
• D) Most standards recommend the indirect method while allowing the direct method.

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Definitions:

Full Disclosure

A principle that requires a company to provide all necessary information in its financial statements that affects the understanding of those statements.

Insider Information

Insider information involves confidential information about a company that has not been made public and that could provide a financial advantage in the markets if known.

Financial Markets

Marketplaces where buyers and sellers engage in trade of financial assets like stocks, bonds, currencies, and derivatives.

Financial Analysis

Financial analysis involves evaluating businesses, projects, budgets, and other finance-related transactions to determine their performance and suitability.