Question 1
The two approaches of reporting cash flows provided by operating activities are the
◦ direct and indirect methods.
◦ basic and standard methods.
◦ liquidity and profitability methods.
◦ gross margin and contribution margin methods.
Question 2
Which of the following methods of reporting cash flows provided by operating activities does the Financial Accounting Standards Board recommend?
◦ The indirect method
◦ An option of either indirect method or the direct method
◦ The direct method
◦ FASB does not state a preference.