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browngoat680Lv1
29 Sep 2019
Which method of presenting cash flows from operations do you find most useful for decision making? Why? Why do you think the FASB requires companies using the direct method also provide the indirect method? Why do you think this is the case?
Which method of presenting cash flows from operations do you find most useful for decision making? Why? Why do you think the FASB requires companies using the direct method also provide the indirect method? Why do you think this is the case?
Lelia LubowitzLv2
29 Sep 2019
Related questions
1. In preparing the Statement of Cash Flows
| a | deprecation is added to net income when calculating Cash FromOperations (under the Indirect Method). | |
| B.deprecation is added to net income when calculating Cash FromOperations (under the Indirect Method) because depreciation is anon-cash expense.
| ||
C. Investing Activities and Financing Activities do not requireany adjustments to net income. | ||
| d | All of the above. |
2.
Why do some companies prefer the use of residual income overreturn on investment in decision making?
| a. | The concept. | |
| b. | ROI can motivate managers to make investment decisions that arenot necessarily in the companyâs best interest. | |
| c. | The calculations for economic profit are easier. | |
| d. | The data needed to calculate return on investment are not alwaysavailable. |
