Spa Company Uses the Direct Method in Determining Net Cash

question 114

Multiple Choice

Spa Company uses the direct method in determining net cash provided by operating activities. The income statement shows income tax expense $85000. Income taxes payable were $35000 at the beginning of the year and $20000 at the end of the year. Cash payments for income taxes are

• A) $70000.
• B) $85000.
• C) $100000.
• D) $140000.

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Definitions:

Indifference Curves

Graphical representations in microeconomics illustrating combinations of goods between which a consumer is indifferent.

Bundles

Groups of goods or services sold together as a single package.

Strong Axiom

A stringent condition in economics that, when applied, implies a level of consistency in consumer choice behavior beyond what is required by weaker axioms.

Revealed Preference

A theory suggesting consumers' preferences can be inferred from their purchasing habits.