Qtopia Company Uses the Direct Method to Prepare Its Statement

question 91

True/False

Qtopia Company uses the direct method to prepare its statement of cash flows. It has reported Cost of Goods Sold of $85,000 on its income statement for the year 2015. If the balance in Accounts Payable, for inventory suppliers only, has gone down by $8,000 during the year, then $8,000 will have to be subtracted from $85,000 as part of the process to calculate payments to suppliers for inventory purchases.

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how much the values in a data set differ from the mean of the data set.

Expected Value

The average value over many repetitions of an experiment, commonly utilized in the fields of probability and statistics.

Sample Proportion

The ratio of members in a sample with a particular attribute to the total number of members in the sample.

Binomial Probability

The likelihood of a given number of successes in a fixed number of trials, where each trial has exactly two possible outcomes.