Current GAAP Permits Two Methods of Calculating and Reporting a Company's

question 29

Essay

Current GAAP permits two methods of calculating and reporting a company's net cash flow from operating activities on its statement of cash flows.
Required:
Identify the two methods.Which method does the FASB prefer? Which method do most companies use and why?

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Definitions:

Mississippi River

The second-longest river in North America, flowing approximately 2,340 miles from its source in Minnesota to the Gulf of Mexico.

Louisiana Purchase

The Louisiana Purchase was a significant land acquisition by the United States from France in 1803, doubling the size of the nation and opening up the continent for westward expansion.

1804 Election

The presidential election in which Thomas Jefferson was elected for his second term, defeating Federalist candidate Charles C. Pinckney.

Best-Selling Book

A book that has sold a very large number of copies, often measured by recognized sales reports.