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:

Discount Rate

The rate of interest that central banks impose on credits extended to commercial banks and other financial entities.

Reserve Requirements

Regulations set by central banks determining the minimum amount of reserves that must be held by a commercial bank, a repeat of the Fed's specific requirement but applicable globally.

Depository Institutions Deregulation

The legislative measures taken to reduce regulation over banks and other depository institutions to enhance their ability to compete and innovate.

Monetary Control Act

A law intended to regulate banking and manage the money supply, possibly referring to specific legislation like the Monetary Control Act of 1980 in the United States, which influenced the Federal Reserve's control over monetary policy.