Which of the Following Is Not True Regarding the Direct

question 48

Multiple Choice

Which of the following is not true regarding the direct and indirect methods of computing net cash flow from operating activities?

• A)Both methods result in the same dollar amount of cash flow from operating activities.
• B)Both methods involve adjusting entries to the company's books so that the accounting records reflect the figures shown in the statement of cash flows.
• C)Both methods are acceptable to the FASB for reporting purposes.
• D)Both methods convert accrual-based income statement amounts to cash flow results.

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Definitions:

Usage of Trade

Established practices, methods, or customs that are widely accepted and utilized in a particular industry or trade.

Dealer Appliance Outlet

A retailer specializing in the sale of appliances, typically offering products from various manufacturers.

Statute of Frauds

A legal principle requiring certain contracts to be in writing and signed to be enforceable, including those for the sale of land or goods above a certain value.

Usage of Trade

Established customs and practices in a particular industry or market that are widely accepted and used by parties in commercial transactions.