A Company Uses the Direct Method to Prepare the Statement

question 109

Multiple Choice

A company uses the direct method to prepare the statement of cash flows.It presents the following data on its financial statements:

*Relates solely to the acquisition of inventory
Which of the following is correct about salaries payable in the operating activities category of the cash flow statement?

• A)The increase of $4,000 will be subtracted from salary expense to determine payments to employees.
• B)The increase of $4,000 will be subtracted from net income.
• C)The increase of $4,000 will be added to salary expense to determine payments to employees.
• D)The increase of $4,000 will be added to net income.

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Definitions:

Official Trade Dress

The visual appearance of a product or its packaging that signifies the source of the product to consumers, which can be legally protected under trademark law.

Logo

A graphical mark or symbol used by businesses to aid and promote public identification and recognition.

Hierarchical Models

Hierarchical models are structured frameworks or systems with levels of authority and organization, designed to streamline decision-making and operations.