A Company Uses the Direct Method to Prepare the Statement

question 161

Multiple Choice

A company uses the direct method to prepare the statement of cash flows. It presents the following amounts on its financial statements. *Relates solely to the acquisition of inventory
What will appear in the operating activities section related to salary payable?

• A)The increase of $3,500 will be subtracted from salary expense to determine payments to employees.
• B)The increase of $3,500 will be subtracted from net income.
• C)The increase of $3,500 will be added to salary expense to determine payments to employees.
• D)The increase of $3,500 will be added to net income.

Understand how budgeting techniques (e.g., flexible, fixed) aid in operational and financial decision-making.

Apply standard costing in variance analysis to assess and control the efficiency and profitability of operations.

Differentiate between favorable and unfavorable variances and understand their financial implications.

Evaluate the efficiency of resource use through the calculation of direct materials and direct labor variances.

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Definitions:

Foreign Market

Markets outside the domestic boundaries of a company where it conducts or aims to conduct business.

Meganational Companies

Large corporations that operate in multiple countries around the world, often exerting significant economic and political influence.

Local Human Capital

The accumulated knowledge, skills, and experience possessed by the workforce within a specific locale, region, or community.

Subsidiary Human Capital

The skills, knowledge, and experience possessed by employees of a subsidiary, which contribute to its value and performance.