Under the Direct Method of Cash Flow,which of the Following

question 5

Multiple Choice

Under the direct method of cash flow,which of the following is not included in the statement of cash flows?

• A)Changes in accounts payable
• B)Changes in accounts receivable
• C)Changes in depreciation
• D)Changes in inventory

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Definitions:

Merchandising Business

A type of business that purchases goods and resells them to consumers without changing their form, primarily making profit through the retail or wholesale of products.

Service Business

A business that provides intangible products or services to customers rather than physical goods.

Closing Entries

The entries that transfer the balances of the revenue, expense, and drawing accounts to the owner’s capital account.

Ratio of Sales

A financial metric used to analyze a company's performance, efficiency, or market position, calculated by comparing sales figures to various other components.