Which of the Following Is Not True Regarding the Statement

question 79

Multiple Choice

Which of the following is not true regarding the statement of cash flows?

• A) The indirect method derives cash flows indirectly by starting with sales revenue and "working backwards" to convert that amount to a cash basis.
• B) Noncash transactions sometimes are reported in conjunction with the statement.
• C) Either the direct or the indirect method can be used to calculate and report the net cash increase or decrease from operating activities.
• D) The statement of cash flows provides information about cash flows that the other statements either do not provide or provide only indirectly.

---

Definitions:

Market Price

The current price at which an asset or service can be bought or sold in the open market.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, resulting in market balance.

Demand

The willingness and ability of consumers to purchase goods or services at a given price level.

Supply

The complete quantity of a product or service that can be bought at a particular price point.