When the Direct Method Is Used to Determine the Net

question 50

Multiple Choice

When the direct method is used to determine the net cash flow from operating activities,other operating expenses are converted into cash outflows for payments to suppliers of services by:

• A)adding changes in prepaid expenses and accrued liabilities to other expenses.
• B)subtracting increases in prepaid expenses and decreases in accrued liabilities from other expenses.
• C)adding increases in prepaid expenses and decreases in accrued liabilities to other expenses.
• D)subtracting changes in prepaid expenses and accrued liabilities from other expenses.