When the Direct Method Is Used to Determine the Cash

question 143

Multiple Choice

When the direct method is used to determine the cash flows from operating activities,other operating expenses are converted into cash outflows by:

• A)adding changes in prepaid expenses and accrued liabilities to other expenses.
• B)subtracting increases in prepaid expenses and subtracting decreases in accrued liabilities from other expenses.
• C)adding increases in prepaid expenses and adding decreases in accrued liabilities to other expenses.
• D)subtracting changes in prepaid expenses and accrued liabilities from other expenses.

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Definitions:

Productive Integration

refers to the effective assimilation and utilization of resources, systems, or workers within an organization or economy to maximize productivity.

Sourcing

The process of finding and selecting suppliers or sources from which goods and services are obtained.

Public Relations Office

An office or department within an organization responsible for managing and guiding the public image and communications of the organization.

Media Regulation

The control or guidance of mass media by governments and other bodies to ensure compliance with laws, standards, and policies, often to protect public interest.