Regarding Consideration,an Act Occurs When a Person

question 23

Multiple Choice

Regarding consideration,an act occurs when a person

• A)complies with the law.
• B)fulfills an obligation under an existing contract.
• C)does something not legally required.
• D)All of these are correct.

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Definitions:

Indirect Methods

A technique used in cash flow statement preparation that adjusts net income for changes in balance sheet accounts to calculate operating cash flow.

Direct Methods

A way to prepare the cash flow statement where actual cash flow information from the company’s operations is used, directly showing sources and uses of cash.

Operating Activities

Activities that constitute the primary or main activities of an organization, such as sales of goods or services, and are reported on the statement of cash flows.

Operating Expenses

Costs associated with the day-to-day functions of a business like rent, utilities, and salaries, excluding the cost of goods sold.