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.