Cribbets Company Uses the Direct Method in Determining Net Cash

question 36

Multiple Choice

Cribbets Company uses the direct method in determining net cash provided by operating activities, During the year, operating expenses were $320,000, prepaid expenses increased $20,000, and accrued expenses payable increased $30,000. Cash payments for operating expenses were

• A) $270,000.
• B) $370,000.
• C) $330,000.
• D) $310,000.

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Definitions:

Total Assets

The sum of all resources owned by a company as reflected on the balance sheet, including both current and non-current assets.

Accumulated Depreciation

Accumulated depreciation represents the total depreciation expense assigned to a fixed asset over its useful life, reducing its book value.

Investments

Assets purchased with the expectation that they will generate income or appreciate in the future.

Owner's Equity

Refers to the residual interest in the assets of a company after deducting liabilities, representing the ownership interest.