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.

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Definitions:

Fluid Accumulation

Fluid accumulation refers to the buildup of fluid in body tissues or cavities, often leading to swelling and discomfort; this can occur due to various medical conditions.

Cornea

The transparent front part of the eye that covers the iris, pupil, and anterior chamber, providing most of the eye's optical power.

Scattering of Light Rays

The process by which light rays are deflected in various directions by particles in their path, affecting how light is perceived.

Pigment Loss

The reduction or absence of melanin or other pigments in the skin, hair, or eyes, which can be hereditary or due to conditions like vitiligo.