Which of the following is a true statement?
A)Research is supportive of the contention that cash and funds flow data are informative above and beyond accrual data.
B)Use of the direct method in the cash flow statement frequently results in non-articulation.
C)Interest expense and long-term notes payable both appear in the financing section of the cash flow statement.
D)With SFAS No. 95, the FASB chose to follow the entity model rather than the traditional income statement (proprietary) approach.

Question

Quizplus · Accepted Answer

A is the only statement that is true according to current accounting research. B is false as the direct method should result in articulation between the cash flow statement and the income statement. C is false as interest expense appears in the operating section and long-term notes payable appear in the financing section. D is false as SFAS No. 95 did not introduce a new model but only required a standardized format for the presentation of cash flows.

Which of the Following Is a True Statement