In a Company That Uses the Direct Method to Prepare

question 4

Multiple Choice

In a company that uses the direct method to prepare the statement of cash flows, the amount of cash it pays in interest expense is computed as

• A)the change in interest payable plus interest expense.
• B)the change in interest payable minus interest expense.
• C)the ending interest payable balance plus interest expense.
• D)the ending interest payable balance minus interest expense.