Part A: The cash flow from operating activities:

Multiple Choice

• comprises only the increase in cash arising from the firms profit-making activities.

• is required to be presented using the direct method by U.S. GAAP and IFRS.

• can be presented by using either the direct method or the indirect method.

• can vary depending on whether the presentation is done under the direct method or the indirect method.

Part B: A survey by Connor Group examining the financial statement impact of ASC 606 found that under the new standard, technology companies are more likely to recognize revenue over time than they did under prior GAAP.

True or False

2. Burgers and More operates a chain of fast-food restaurants across the United States. The restaurants are franchised operations. Under the franchise agreement, restaurant owners have the right to use the Burgers and More trade name, financing arrangements for franchisees, and management training at the corporate headquarters as well as the right to use training videos for their employees. The Burgers and More franchise contracts contain the following separate performance obligations:

Multiple Choice

• intellectual property, financing, and training

• intellectual property

• intellectual property, training

• financing and training