A Company Reported an Increase in Accounts Payable and a Decrease

question 1

Multiple Choice

A company reported an increase in accounts payable and a decrease in inventory during 2019.Which of the following statements is correct?

• A)Cash paid to suppliers equals cost of goods sold plus both the increase in accounts payable and the decrease in inventory.
• B)Cash paid to suppliers equals cost of goods sold minus both the increase in accounts payable and the decrease in inventory.
• C)Cash paid to suppliers equals cost of goods sold minus the increase in accounts payable,plus the decrease in inventory.
• D)Cash paid to suppliers equals cost of goods sold plus the increase in accounts payable,minus the decrease in inventory.

Calculate and record depreciation expense using different methods (straight-line, double-declining-balance, units-of-production).

Distinguish between capital and revenue expenditures and their effects on financial statements.

Account for natural resources, intangible assets, and property, plant, and equipment, including acquisition, depreciation, amortization, and disposal.

Analyze and prepare adjusting and closing entries related to asset acquisition, depreciation, disposal, and renovation.

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Definitions:

Spending Variance

The difference between the budgeted or standard cost of something and the actual amount spent, often analyzed in budgeting and cost management.

Budgeting Formulas

Mathematical expressions used in the preparation of budgets to estimate future costs, revenues, and resources requirements.

Revenue Variance

The gap between what was expected in revenue and what was actually earned.

Budgeting Formulas

Mathematical expressions used to forecast and plan financial outcomes based on various inputs and assumptions.