Under the Direct Method of Preparing the Statement of Cash

question 44

Multiple Choice

Under the direct method of preparing the statement of cash flows,which statement is CORRECT regarding the method of computing cash payments to suppliers for inventory?

• A)Cost of goods sold less a decrease in inventory plus an increase in accounts payable.
• B)Cost of goods sold plus an increase in inventory less an increase in accounts payable.
• C)Cost of goods sold plus an increase in inventory plus an increase in accounts payable.
• D)Cost of goods sold plus a decrease in inventory plus an increase in accounts payable.

---

Definitions:

Contented

A state of satisfaction and happiness, often resulting from fulfilling one's needs or achieving desired outcomes.

Emotional Reaction

An individual's immediate affective response to a stimulus, which can influence behavior and decision-making.

Future Possible Activities

Activities or tasks that individuals or groups might undertake in the future, which are currently considered as options or plans.

Cognitive Responses

The mental reactions and thoughts that arise in response to external stimuli, forming the basis of attitudes, beliefs, and actions.