The Financial Accounting Standards Board prefers companies to use this method to prepare the operating section on their statement of cash flows: Group of answer choices the direct method the weighted-average method the indirect method the straight-line method

The Financial Accounting Standards Board prefers companies to use this method to prepare the operating section on their statement of cash flows: Group of answer choices the direct method the weighted-average method the indirect method the straight-line method

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

The Financial Accounting Standards Board prefers companies to use this method to prepare the operating section on their statement of cash flows:

Group of answer choices

the direct method

the weighted-average method

the indirect method

the straight-line method

Definition Definition Net amount of cash that an entity receives and expends over the course of a given period. For a business to continue operating, positive cash flows are required, and they are also necessary to produce value for investors. Investors in particular prefer to see growing cash flows even after capital expenditures have been paid for (which is known as free cash flow).

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