A Company Uses the Direct Method to Prepare the Statement

question 158

Multiple Choice

A company uses the direct method to prepare the statement of cash flows. It presents the following data on its financial statements: *Relates solely to the acquisition of inventory
What will appear in the operating activities section related to accounts payable?

• A)The increase of $18,000 will be subtracted from net income.
• B)The increase of $18,000 will be added to net income.
• C)The increase of $18,000 will be added to purchases to determine payments to suppliers.
• D)The increase of $18,000 will be subtracted from purchases to determine payments to suppliers.

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Definitions:

Suprasternal Notch

The anatomical indentation visible at the throat's base, above the sternum and between the clavicles.

Jugular Notch

A large, visible dip in the upper edge of the sternum, between the neck and the collarbone.

Clavicle

A long bone that serves as a strut between the shoulder blade and the sternum or breastbone; also known as the collarbone.

Surface Anatomy

The study of the external features of the body to understand the structures lying beneath them.