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.

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Definitions:

Conform

To match one's attitudes, beliefs, or behaviors to group norms or expectations.

Social Pressure

The influence exerted by a society or social group on individuals to conform to expected norms and behaviors.

Public Behavior

relates to how individuals act and interact in social settings and public places, governed by societal norms and etiquette.

Compliance

The act of conforming to a request or demand, often from a figure of authority.