Which of the Following Would Appear on a Statement of Cash

question 140

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:

Estimated Inventory Returns

An approximation of the amount of inventory that is expected to be returned by customers over a specified period.

Normal Account Balances

The typical or expected balance of an account based on its classification in accounting, such as debit for assets and credit for liabilities.

Refund Liability

An obligation recorded on the company's balance sheet, representing the expected refunds to customers for returns or dissatisfaction over a period.

Estimated Inventory Returns

The estimated amount of goods a company predicts will be returned by customers after purchase.