Under the Direct Method of Preparing the Statement of Cash

question 37

Multiple Choice

Under the direct method of preparing the statement of cash flows, which statement is correct regarding the method of computing interest revenue?

• A) Sales plus a decrease in interest receivable
• B) Interest revenue plus a decrease in interest receivable
• C) Interest revenue plus an increase in interest receivable
• D) Interest revenue less a decrease in interest receivable

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Definitions:

Informal Reasoning

The process of thinking about something in a non-structured or non-formal way, often based on personal judgment or experience.

Algorithm

A set of rules or a step-by-step process designed to perform a specific task or solve a problem.

Randomly

Without method or conscious decision, in a way that appears unsystematic.

Reflective Judgment

The process of critically evaluating the validity of various claims and evidence before forming a conclusion.