Using the Direct Method of Preparing the Statement of Cash

question 146

Multiple Choice

Using the direct method of preparing the statement of cash flows, which of the following is not an activity generating operating cash flows?

• A)Payments to employees
• B)Payments to suppliers
• C)Repayment of debt
• D)Payments for utilities expenses

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Definitions:

Matures

Refers to the final payment date of a financial instrument at which point the principal (and all remaining interest) is due to be paid.

Days

A unit of time measurement that typically represents a 24-hour period.

Loan

Funds lent with the anticipation of repayment plus an additional amount known as interest.

Interest

The fee for lending money, usually shown as a yearly percentage of the main sum.