Which of These Best Describes the Direct Method of Determining

question 7

Multiple Choice

Which of these best describes the direct method of determining cash flows from operating activities?

• A)Determination from adjusting net profit for non- cash receipts and payments
• B)Determination from the comprehensive statement of income
• C)Determination from the statement of financial position
• D)Determination from cash receipts and payments

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Definitions:

Customers Served

The number of unique clients or customers that a business or service has provided for over a specific period.

Revenue Variance

The variance between projected revenue and the actual income received.

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor.