(Appendix) When Preparing a Schedule for the Calculation of Cash

question 34

Multiple Choice

(Appendix) When preparing a schedule for the calculation of cash generated from operating activities under the direct method, the decrease in Merchandise Inventory is

• A) added to cost of goods sold.
• B) added to operating expenses.
• C) subtracted from cost of goods sold.
• D) subtracted from operating expenses.

Recognize the functions of different buttons and commands in software interfaces.

Identify methods to adjust computer settings and app configurations.

Recognize the essential elements and tools within software suites.

Understand the concepts and applications of basic computer graphics and presentations.

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Definitions:

Cash Dividend

A distribution of a portion of a company's earnings, decided by the board of directors, to its shareholders in the form of cash.

Operating Activities

Activities that relate directly to the primary business operations, including revenues and expenses, cash flows, and transactions.

Direct Method

A cash flow statement preparation approach that lists major payments and receipts of cash from operational activities directly.

Indirect Method

An approach used in cash flow statements where net income is adjusted for non-cash transactions, deferred revenues, and expenses to calculate cash flow from operating activities.