The Direct Method of Reporting Operating Cash Flows

question 12

Multiple Choice

The direct method of reporting operating cash flows:

• A)Is recommended but not required by the FASB.
• B)Must be used by all companies.
• C)Is used by most companies.
• D)Is considered supplementary disclosure.
• E)Is not recommended by the FASB,but is commonly used.

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Definitions:

Employment

A formal relationship between an individual and an employer where the individual performs tasks in exchange for compensation, such as salary or wages.

Economy's Ability

Refers to the capacity of an economy to produce goods and services, generate employment, and sustain economic growth.

Generate Wealth

The process of creating financial abundance through various means such as entrepreneurship, investment, or innovation.

Business Cycle

The fluctuations in economic activity that an economy experiences over a period, characterized by periods of expansion and contraction.