Which of the following statements is false? A. The method of preparing the opera

Question

Which of the following statements is false?

A. The method of preparing the operating activities section of a statement of cash flows which adjusts net income to remove the effects of deferrals and accruals for revenues and expenses is the indirect method

B. The FASB prefers the direct method of preparing the operating activities section of the statement of cash flows

C. Most companies use the direct method of preparing the operating activities section of the statement of cash flows.

D. The method of preparing the operating activities section of the statement of cash flows which reports its cash inflows from operations followed by its cash outflows for operations is the direct method

Explanation / Answer

Answer: Option C is false...

Explanation: It is given that most companies use the direct method of preparing the operating activities section of the statement of cash flows,it is false.As per the research and analysis most of the companies use indirect method for preparing the operating activities section of the statement of cash flows.There option is false and our answer is option c..

Thanks.....

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