If the Direct Method Is Used to Report Cash Flows

question 110

True/False

If the direct method is used to report cash flows from operating activities in the body of the statement of cash flows, a reconciliation of net income to net cash flows from operating activities also is required.

---

Definitions:

Hawthorne Studies

A series of studies conducted in the early 20th century that examined how different work conditions affected employee productivity and concluded that workers were more motivated by attention and social factors than physical conditions.

Classical Management

A theory of management that emphasizes structured organization, hierarchy, and clear, defined roles and duties to enhance efficiency.

Productivity

The efficiency at which goods and services are produced, often measured by the output per unit of input.

Economic Incentives

Financial rewards or benefits used to motivate individuals or entities towards certain behaviors that align with economic goals.