Which of the Following Statements Is Incorrect Regarding Preparing a Statement

question 140

Multiple Choice

Which of the following statements is incorrect regarding preparing a statement of cash flows using the direct method?

• A) The direct method shows adjustments to net income.
• B) The direct method shows the specific sources and uses of cash that are associated with operating activities.
• C) Noncash expenses, gains, and losses are not used in the determination of net cash flow from operating activities.
• D) A majority of companies use the indirect method rather than the direct method.

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Definitions:

Black, Tarry Stools

Feces that have a dark, tar-like appearance, typically indicative of bleeding in the upper gastrointestinal tract.

Lower Extremity

Refers to the lower part of the body, including the hips, thighs, knees, calves, ankles, and feet.

Swollen and Warm

Describes an area of the body that has become enlarged and feels hot to the touch, often due to inflammation or infection.

Jugular Vein Distention

The abnormal swelling of the jugular vein, often indicative of heart or circulation issues.