Which of the Following Statements Is True Regarding GAAP and Reporting

question 46

Multiple Choice

Which of the following statements is true regarding GAAP and reporting operating activities on the statement of cash flows?

• A) The direct method is required of large companies.
• B) The GAAP prefers the indirect method.
• C) The GAAP prefers the direct method.
• D) The GAAP did not express a preference for either the direct or indirect method.

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Definitions:

Biramous Appendages

Appendages with two jointed branches extending from their base. Compare with uniramous appendages.

Arthropods

A large group of invertebrate animals that includes insects, spiders, crustaceans, and others, characterized by segmented bodies, exoskeletons, and jointed limbs.

Crustaceans

A diverse group of arthropods, including crabs, lobsters, and shrimp, typically having a segmented body and an exoskeleton.

Vectors

Entities that carry and transmit genetic information or physical quantities, characterized by magnitude and direction.