The Main Disadvantage of the Direct Method of Reporting Cash

question 97

True/False

The main disadvantage of the direct method of reporting cash flows from operating activities is that the necessary data are often costly to accumulate.

---

Definitions:

Pendleton Act

An 1883 U.S. federal law that established that positions within the federal government should be awarded based on merit instead of political affiliation.

Spoils System

The spoils system is a political practice where a political party, after winning an election, gives government jobs to its supporters, friends, and relatives as a reward for working toward victory, rather than for their expertise.

Civil Service Protections

Safeguards for government employees that ensure stability, fairness in hiring and firing, and protection from political pressures.

Hatch Act

A U.S. federal law enacted in 1939 that restricts the political activities of federal employees to ensure a nonpartisan federal workforce.