An important distinction between the direct method and the indirect method of preparing a statement of cash flows is that: a              The format of the section computing net cash flow from operating activities is different under the two methods. b              The direct method reconciles accrual-based net income with net cash flow from operations; the indirect method shows the specific cash inflows and outflows constituting the operating activities. c              The direct method results in a lower (more conservative) figure for net cash flow from operating activities than does the indirect method. d              Only those statements of cash flows prepared using the direct method are in accordance with generally accepted accounting principles as set forth by the FASB.

Which of the following sections of the statement of cash flows include activities that increase and decrease long-term assets? the investing activities section Should not be reported on cash flow statement OO the financing activities section the operating activities section

When Generating a Statement of Cash Flows, the direct method of preparation would result in a greater value in Net Cash Provided by Operating Activities then the Indirect Method True False

Which of the following statements about the direct and indirect methods for presenting Cash Flow Statement is NOT true?  According to the indirect method, cash flows begin with net income or loss and is followed by subsequent additions to or deductions from that amount for non-cash revenue and expense items, resulting in cash flow from operating activities. The direct method is based on use of actual cash inflows and outflows from a company’s operations. Using direct and indirect methods leads to different amounts shown as cash flow from operations, investing, and financing activities. The cash flow statement, income statement and balance sheet are interconnected: the cash flow amount is equal to the corresponding income statement amount plus or minus the change in the related balance sheet account.

The two approaches to reporting cash flows provided by operating activities are the   a. the liquidity and profitability methods. b. the basic and standard methods. c. direct and indirect methods. d. the gross margin and contribution margin methods.

The payback period method is inferior to the net present value method because it ________.     is difficult to compute     Deals with accounting income rather than cash flows     Fails to consider cash flows beyond the payback period

(47) The FASB and IASB prefer the direct method of reporting operating cash flows on the statement of cash flows. True False