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.