Qtopia Company Uses the Direct Method to Prepare Its Statement

question 136

True/False

Qtopia Company uses the direct method to prepare its statement of cash flows. It has reported Cost of goods sold of $70,000 on its income statement for the year 2012. If the balance in the inventory account has gone up by $2,000 during the year, then $2,000 will have to be added to $70,000 as part of the process to calculate payments to suppliers for inventory purchases.

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Definitions:

Family Theory

A framework in social science that explores the dynamics, patterns, and functions of family relationships and structures.

Group Dynamics

The study of behaviors, psychological processes, and changes that occur within groups and affect their function and outcomes.

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Schizophrenic

Relating to schizophrenia, a chronic brain disorder characterized by delusions, hallucinations, disorganized speech or behavior, and impaired cognitive ability.