The Direct Method for the Preparation of the Operating Activities

question 3

Multiple Choice

The direct method for the preparation of the operating activities section of the statement of cash flows:

• A) Separately lists each major item of operating cash receipts and cash payments.
• B) Reports adjustments to reconcile income to net cash provided or used by operating activities in the statement.
• C) Reports a different amount of cash flows from operations than if the indirect method is used.
• D) Is required if the company is a merchandiser.
• E) Is required by the IASB.

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Definitions:

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