Assume That the Direct Method Is Used to Prepare the Operating

question 79

Multiple Choice

Assume that the direct method is used to prepare the operating activities section of the statement of cash flows.Which related balance sheet account will explain the difference between revenues on the income statement and cash collected from customers?

• A)Inventory
• B)Accounts Payable
• C)Cost of Goods Sold
• D)Accounts Receivable

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Definitions:

Household Members

Individuals who occupy the same residential unit and share living arrangements, which may or may not be related by blood or marriage.

Physical Custody

A legal term referring to with whom a child lives and the arrangements for taking care of the child's daily needs.

Father

A male parent or guardian of a child, contributing to the child’s care, upbringing, and genetic makeup.

Stepparent Family

A rephrased definition: A family configuration where children are raised by a biological parent and their new spouse, who is not the children's biological parent.