Which of the following statements is false?
A)The method of preparing the Operating Activities section of a statement of cash flows that adjusts net income to remove the effects of deferrals and accruals for revenues and expenses is the indirect method.
B)The method of preparing the Operating Activities section of a statement of cash flows that reports major classes of gross cash receipts and cash payments for revenues and expenses is the direct method.
C)The FASB prefers the direct method of preparing the Operating Activities section of the statement of cash flows.
D)Most companies use the direct method of preparing the Operating Activities section of the statement of cash flows.

Question

Quizplus · Accepted Answer

Most companies actually use the indirect method, not the direct method, for preparing the Operating Activities section of the statement of cash flows. Therefore, statement D is false. Statements A, B, and C are all true.

Which of the Following Statements Is False