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.

---

Definitions:

Summarized Business Information

A concise representation of key data, findings, or conclusions from detailed business reports or analytics.

Intellectual Property Rights

Legal rights granting creators control over the use of their original works, including patents, trademarks, copyrights, and trade secrets.

Commercial Value

The monetary or economic worth of a product, service, or brand in the marketplace.

Paraphrasing

The process of restating another person's ideas or information in one's own words without altering the original meaning.