A Company Uses the Direct Method to Prepare the Statement

question 97

Multiple Choice

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

• A)The amount of cash payments to suppliers is computed as interest expense minus the decrease in accounts payable.
• B)The amount of cash payments to suppliers is computed as purchases minus the increase in accounts payable.
• C)The amount of cash payments to suppliers is computed as interest expense minus the decrease in merchandise inventory.
• D)The amount of cash payments to suppliers is computed as interest expense minus the increase in merchandise inventory.

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Definitions:

Cigarette Smoking

The process of breathing in and out the smoke generated from burning tobacco in cigarettes, which is detrimental to one's health.

Cardiovascular Death

Death resulting from diseases related to the heart and blood vessels, such as heart attack or stroke.

Behavioral Risk Factor

Behaviors that increase the likelihood of developing medical problems or diseases, such as smoking or a sedentary lifestyle.

Hypertension

A medical condition characterized by persistently high blood pressure.