Which of the Following Is Not True Regarding the Statement

question 79

Multiple Choice

Which of the following is not true regarding the statement of cash flows?

• A) The indirect method derives cash flows indirectly by starting with sales revenue and "working backwards" to convert that amount to a cash basis.
• B) Noncash transactions sometimes are reported in conjunction with the statement.
• C) Either the direct or the indirect method can be used to calculate and report the net cash increase or decrease from operating activities.
• D) The statement of cash flows provides information about cash flows that the other statements either do not provide or provide only indirectly.

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Definitions:

Diversification Strategy

A business policy of increasing the variety of products or markets served to spread risk and create opportunities for growth.

Business Area

A specific segment of a business organization that focuses on a particular market or product line.

Cash Cow

A business unit or product that generates a consistently high amount of cash flow, exceeding its maintenance and development costs, typically funding other business areas.

BCG Matrix

A tool to analyze business opportunities according to market growth rate and market share.