A Company Uses the Direct Method to Prepare the Statement

question 26

Multiple Choice

A company uses the direct method to prepare the statement of cash flows.How will the amount of cash payments to employees be computed?

• A)The amount of cash payments to employees is computed as salary expense plus the decrease in salaries payable.
• B)The amount of cash payments to employees is computed as salary expense plus the ending balance salaries payable.
• C)The amount of cash payments to employees is computed as salary expense plus the increase in salaries payable.
• D)The amount of cash payments to employees is computed as salary expense plus the beginning balance in salaries payable.

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Definitions:

Regression Equation

A formula derived from regression analysis that predicts the dependent variable based on one or more independent variables.

Predicted Values

The outcomes forecasted by a statistical model, which represent the model's estimation of the dependent variable based on independent variable(s).

Standardized Residuals

Residuals normalized to have a mean of zero and a standard deviation of one, used in regression analysis to identify outliers.

Regression Equation

An equation that estimates the relationship between a dependent variable and one or more independent variables.