Avatar Company Uses the Direct Method to Prepare Its Statement

question 94

Multiple Choice

Avatar Company uses the direct method to prepare its statement of cash flows. Please refer to the following information reported for the year 2014:
$\begin{array}{ll}\text { Operating expenses } & \$ 23,000 \\\text { Accrued liabilities beginning balance: } & \$ 1,000 \\\text { Accrued liabilities ending balance: } & \$ 2,000\end{array}$
What amount was paid to suppliers for operating expenses on a cash basis?

• A) $26,000
• B) $20,000
• C) $22,000
• D) $24,000

Distinguish between different time study techniques and their uses.

Recognize the significance of allowances and performance ratings in setting labor standards.

Understand the calculation of normal time and standard time from observed data.

Comprehend the impact of sample size and accuracy on work measurement.

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Definitions:

Tax Benefit

A reduction in tax liability, often received through deductions, credits, or other allowances.

Selling Price

The amount of money for which something is sold in the market.

Book Value

The net value of a company's assets minus its liabilities, often compared to the market value to assess if a stock is under or overvalued.

Net Working Capital

The difference between a company's current assets and current liabilities, indicating its short-term financial health and ability to meet short-term obligations.