Which Method Will Yield the Higher Cash Flows from Financing

question 125

Multiple Choice

Which method will yield the higher cash flows from financing activities?

• A)The indirect method.
• B)The direct method.
• C)Both direct and indirect methods will yield the same amount.
• D)Depends upon the situation.

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Definitions:

Posting Process

The procedure of transferring entries from a company's journal into the appropriate accounts in its ledger, which helps in summarizing financial activities.

Trial Balance

A financial record-keeping sheet that consolidates the balances of various ledgers into uniform debit and credit column totals.

Journalizing

The process of recording transactions in a journal or ledger in the field of accounting.

Posting Process

In accounting, this is the step where transactions are transferred from the journal to the respective accounts in the ledger, updating the account balances.