Qtopia Company Uses the Direct Method to Prepare Its Statement

question 157

True/False

Qtopia Company uses the direct method to prepare its statement of cash flows. It has reported operating expenses of $21,000 on its income statement for the year 2012. If the balance in accrued liabilities has gone up by $1,000 during the year, then $1,000 will have to be added to $21,000 as part of the process to calculate payments to suppliers for operating expenses.

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Definitions:

Farming Business

The operation of cultivating land, raising crops, and sometimes raising livestock, for the purpose of producing food and other agricultural products for consumption and sale.

Agricultural Products

Items produced through farming and agriculture, including crops, livestock, and other raw materials such as grains, fruits, and vegetables.

Quantity Supplied

The total amount of a good or service that producers are willing and able to sell at a given price in a specified period.

Quantity Supplied

The amount of a commodity that producers are willing and able to sell at a given price level in a given time period.