While the Indirect Method Is Prevalent in the Construction of Cash

question 17

Multiple Choice

While the indirect method is prevalent in the construction of cash flow statements in the U.S., why might a firm choose to construct its cash flow statement using the direct method?

• A)The direct method will always show a higher net change in cash.
• B)The direct method is usually easier for users to understand.
• C)The direct method is required by some industries.
• D)The direct method will always make the firm's management look better.
• E)None of the above answer choices is correct.

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Definitions:

Codon

A triplet of mRNA nucleotides. The 64 possible codons collectively constitute a universal genetic code in which each codon specifies an amino acid in a polypeptide, or a signal to either start or terminate polypeptide synthesis.

Double-Stranded DNA

The structure of DNA consisting of two strands coiling around each other, forming a double helix.

Minimal Media

A type of growth medium containing only the minimal necessities for the growth of wild-type microorganisms (such as bacteria).

Complete Medium

A culture medium that contains all the nutrients needed for the growth and proliferation of a wide range of microorganisms.