Presented Below Is the Operating Activities Section of the Statement

question 183

Multiple Choice

Presented below is the operating activities section of the statement of cash flows for Golden Consulting for 2012: Which method of preparing the operating activities section has Golden Consulting used?

• A)The direct method.
• B)The indirect method.
• C)Either method.
• D)Cannot be determined without further information.

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Definitions:

Collateralized Borrowing

Obtaining a loan by pledging an asset as security for the loan, which the lender can seize if the borrower defaults.

Assets

Resources owned by a company that provide future economic benefits.

Liabilities

Financial obligations or debts that an entity owes to others, which must be settled over time through the transfer of economic benefits.

Surrenders Control

The action of relinquishing authority, power, or ownership over an entity, asset, or decision-making process to another party.