When the Direct Method Is Used to Determine the Cash

question 89

Multiple Choice

When the direct method is used to determine the cash flows from operating activities,which of the following adjustments must be made to interest expense to determine total interest payments?

• A)Add all changes in interest payable.
• B)Add decreases in interest payable and subtract increases in interest payable.
• C)Add increases in interest payable and subtract decreases in interest payable.
• D)Subtract all changes in interest payable.

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Definitions:

Financial Reporting

The process of disclosing financial information and performance results to management, investors, and the public.