If a Company Uses the Direct Method to Prepare the Statement

question 43

Multiple Choice

If a company uses the direct method to prepare the statement of cash flows, how will the amount of cash payments to employees be computed?

• A)The amount of cash payments to employees is computed as salary expense plus the ending balance salaries payable.
• B)The amount of cash payments to employees is computed as salary expense plus the decrease in salaries payable.
• C)The amount of cash payments to employees is computed as salary expense plus the increase in salaries payable.
• D)The amount of cash payments to employees is computed as salary expense plus the beginning balance in salaries payable.

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Definitions:

Infant Mortality Rates

A statistical measure that represents the number of deaths of infants under one year old per 1,000 live births in a given year.

One Year

A period consisting of 12 consecutive months.

Fewer Than

A comparative term indicating a smaller quantity or number of items, objects, or people.

Morbidity Rates

Indicate the number of people who suffer from particular illnesses per 100000 members of a population.