Asked by
shakheema davis
on Oct 15, 2024
Verified
All of the following statements related to reporting cash flows from investing and financing activities are true except:
A) Reporting of financing activities is the same under the direct method and indirect method.
B) Changes in noncurrent liability accounts and equity accounts are analyzed to determine cash flows from financing activities
C) Changes in noncurrent asset accounts,current notes receivable,and current investments are analyzed to determine cash flows from investing activities.
D) The direct method applies accrual accounting while the indirect method applies cash basis accounting.
E) Reporting of investing activities is the same under the direct method and indirect method.
Investing Activities
Transactions and events that involve the acquisition or disposal of long-term assets and investments by a company.
Financing Activities
Transactions that result in changes in the size and composition of the equity and borrowings of a company.
Direct Method
A cash flow statement preparation approach that lists major classes of gross cash receipts and payments.
- Obtain insight into the elements and the preparation strategy for the statement of cash flows.
- Examine transitions in long-term investments, liabilities, and shareholders' equity to establish cash flows originating from financing and investment activities.
Verified Answer
JH
Learning Objectives
- Obtain insight into the elements and the preparation strategy for the statement of cash flows.
- Examine transitions in long-term investments, liabilities, and shareholders' equity to establish cash flows originating from financing and investment activities.