Under the Direct Method of Preparing the Statement of Cash

question 98

Multiple Choice

Under the direct method of preparing the statement of cash flows,which statement is CORRECT regarding the calculation of cash collected from 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:

Equilibrium Price

The cost at which the amount of a product or service being sought matches the amount available, resulting in a stable market.

Price Ceiling

A government-imposed limit on how high the price of a product can be charged in the market to protect consumers from excessive prices.

Government

The organization that governs or administers a specific territory or country, responsible for creating and enforcing laws, policies, and regulations.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to buy at a particular price.