Davis Company Uses the Direct Method to Prepare Its Cash

question 83

Multiple Choice

Davis Company uses the direct method to prepare its cash flow statement.Refer to the following information reported for the year 2016: Operating expenses,$27,000
Accrued liabilities,beginning balance,$3400
Accrued liabilities,ending balance,$5500
What amount was paid to suppliers for operating expenses on a cash basis?

• A)$30,400
• B)$32,500
• C)$29,100
• D)$24,900

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Definitions:

Mutual Benefit

This principle asserts that actions or transactions should advantage all parties involved, rather than benefiting one at the expense of another.

Mirror-image Perceptions

The phenomenon where opposing parties see themselves in the best light and the opposing party negatively, often exacerbating conflicts.

Reciprocity Norm

A social rule that suggests people should return the favors or benefits that they have received from others.

Social Prescriptions

Expectations and norms dictated by society regarding how individuals should behave.