Three Formats Are Acceptable Under SFAS 95 for Presenting Cash

question 9

True/False

Three formats are acceptable under SFAS 95 for presenting cash flow from operations: the direct method, the summary method and the indirect method.

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Definitions:

Trade

The activity of buying, selling, or exchanging goods and services between people, firms, or countries.

Comparative Advantage

The ability of a country or firm to produce a particular good or service at a lower opportunity cost than its trade partners.

Opportunity Cost

The cost of foregoing the next best alternative when making a decision. It represents the benefits an individual, investor, or business misses out on when choosing one alternative over another.

Production Possibilities Frontier

A graphical representation showing the maximum quantity of two goods or services that an economy can produce when all resources are used efficiently.