Under the Direct Method of Preparing the Operating Section of the Statement

question 46

Multiple Choice

Under the direct method of preparing the operating section of the statement of cash flows,net cash provided by financing activities is $558,000.If the indirect method of preparing the statement of cash flows was used:

• A)net cash provided by financing activities would be less than $558,000.
• B)net cash provided by financing activities would be more than $558,000.
• C)net cash provided by financing activities would be the same,$558,000.
• D)net cash provided by operating activities would equal $558,000.

---

Definitions:

Horizontal Analysis

Horizontal analysis, also known as trend analysis, is a financial analysis technique that compares historical financial data over a series of periods to identify trends, increases, or decreases in financial performance.

Percentage Changes

A calculation that describes the proportionate change in a value over time, indicating growth or decline.

Leveraging

The use of various financial instruments or borrowed capital to increase the potential return of an investment.