Which of the Following Correctly Describes a Difference Between the Direct

question 23

Multiple Choice

Which of the following correctly describes a difference between the direct method and the indirect method of computing operating cash flow?

• A) The direct method is used when accounting records are kept on a cash basis; the indirect method is used when accounting records are maintained on an accrual basis.
• B) The direct method may be used only when a company maintains special journals for cash receipts and cash disbursements; the indirect method is used in all other situations.
• C) Both the direct and the indirect methods result in the same net cash from operating activities, but the format of this section of the statement of cash flows is different under the alternative methods.
• D) The direct method is used when all accounting records and bank statements are available; the indirect method is used when some accounting records or documents are missing or have been destroyed.
• Essay Questions

Plot residuals against predicted values to assess model fit.

Interpret the implications of regression analysis findings in research contexts.

Identify and interpret possible outliers in data.

Understand the implications of non-constant variance in regression error terms.

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Definitions:

Bad News

Communication that conveys unfavorable, disappointing, or upsetting information to the recipient.

Transaction

An exchange or interaction between two parties, typically involving the buying, selling, or trading of goods, services, or information.

Relationship Repair

The actions taken to address issues, misunderstandings, or conflicts in a relation in order to restore positive connection and understanding.

Indirect Format

A communication method that does not state the main point directly at the beginning, often used to soften the message or build context.