Which of the Following Methods, Allowed by U

question 94

Multiple Choice

Which of the following methods, allowed by U.S.GAAP, report(s) the net income for a period adjusted by revenues converted to cash received from customers and expenses converted to cash disbursed to various suppliers of goods and services?

• A)the direct method
• B)the indirect method
• C)both the direct method and the indirect method
• D)the schedule of cash receipts and cash disbursements
• E)the funds flow statement

---

Definitions:

Securities

Investment assets that denote a shareholding in a publicly-listed company (stock), a bondholder’s claim against a corporation or government, or ownership rights as outlined in an option contract.

Project Costs

Project Costs include all expenses incurred during the execution of a project, including materials, labor, and overhead.

Subjective Approach

A method based on personal opinions, interpretations, points of view, emotions and judgment.

Cost of Capital

The minimum return rate that a company needs to achieve on its investment initiatives to preserve its market valuation and draw in capital.