Under the Direct Method of Preparing the Statement of Cash

question 124

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?

• 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 a decrease 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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