Urban Installations Company Uses the Direct Method to Prepare Its

question 147

True/False

Urban Installations Company uses the direct method to prepare its statement of cash flows.Urban has reported cost of goods sold of $95,000 on its income statement for 2018.If the balance in the Merchandise Inventory account decreased by $6,000 during the year,then $6,000 needs to be added to $95,000 to calculate payments to suppliers for inventory purchases.

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Definitions:

Just In Time

A management strategy that aligns raw-material orders from suppliers directly with production schedules to increase efficiency and reduce waste.

Continuous Improvement

An ongoing effort to improve products, services, or processes through incremental and breakthrough improvements.

Quality Circles

Small groups of employees who voluntarily meet on a regular basis to identify, analyze, and solve work-related problems, typically focusing on quality improvement.

NLRA

Refers to the National Labor Relations Act of 1935, U.S. legislation that protects the rights of employees and employers, to encourage collective bargaining, and to curtail certain private sector labor and management practices.