Which of the Following Would Appear on a Statement of Cash

question 124

Multiple Choice

Which of the following would appear on a statement of cash flows prepared using the direct method?

• A) Adjustments to net income
• B) Cash payments for salaries
• C) Adjustments for gains and losses on sale of property
• D) Increase/decrease in current assets

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Definitions:

Owner's Equity

The residual interest in the assets of the entity after deducting liabilities, representing the ownership interest of shareholders in a company.

Financial Statements

Consolidated reports detailing the financial performance and position of a company, including the balance sheet, income statement, and cash flow statement.

Inventory

The goods and materials a business holds for the ultimate purpose of resale or processing.

Perpetual Inventory System

An accounting method that records the sale or purchase of inventory immediately through the use of computerized point-of-sale systems and enterprise asset management software.