A Company Uses the Direct Method to Prepare the Statement

question 76

Multiple Choice

A company uses the direct method to prepare the statement of cash flow computes the amount of cash it receives from customers as

• A)cost of goods sold plus ending inventory minus beginning inventory.
• B)cost of goods sold minus ending inventory plus beginning inventory.
• C)sales revenue plus the decrease (or minus the increase)in accounts receivable.
• D)sales revenue minus the decrease (or plus the increase)in accounts receivable.

---

Definitions:

Latin

A classical language originating from the Roman Empire, now primarily used in scholarly and ecclesiastical contexts.

Plaintiff

The party who initiates a lawsuit in a court of law against another party (the defendant) to obtain a remedy or damages.

Lawsuit

A legal action or proceeding between two parties, plaintiff and defendant, conducted in a court of law.

Court Determination

The final decision or judgment issued by a court of law.