The Direct Method of Preparing a Statement of Cash Flows

question 21

Multiple Choice

The direct method of preparing a statement of cash flows

• A)eliminates the need for a schedule of noncash investing and financing transactions.
• B)provides a different result than the indirect method.
• C)adjusts net income for changes in current accounts.
• D)shows cash receipts from sales.

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Definitions:

Buying Systems

The organizational structures and processes through which companies purchase goods and services.

Committee

A group of individuals appointed to perform a specific task or to deliberate on a particular issue, often within a larger organization or assembly.

B2B

Business-to-Business, referring to transactions or strategies between two or more businesses rather than between businesses and individual consumers.

Buying Decisions

The process by which individuals or organizations choose whether to purchase, what to purchase, and from whom to purchase, based on factors like needs, preferences, and financial resources.