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

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Definitions:

Unconditioned Stimulus

A stimulus that naturally and automatically triggers a response without the need for prior learning.

Meat Powder

Finely ground meat used in classical conditioning experiments, notably by Ivan Pavlov, as a stimulus to elicit salivation in dogs.

Salivate

To salivate means to produce saliva, often in anticipation of food or in response to its presence, characterized by the physiological process of digestion.

Salivation in Dogs

An automatic response that occurs in dogs when they anticipate food, famously studied by Pavlov in his classical conditioning experiments.