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:

Cognitive Psychology

A field within psychology focused on studying cognitive functions such as thinking, perceiving, memory, and learning.

Thinking

The mental manipulation of representations of information we encounter in our environments.

Memory

The nervous system’s ability to obtain and retain information and skills for later retrieval.

Attention

The focusing of mental resources on specific information to become consciously aware of that information.