The Following Selected Account Balances Appeared on the Financial Statements

question 92

Multiple Choice

The following selected account balances appeared on the financial statements of the Washington Company: The Washington Company uses the direct method to calculate net cash flow from operating activities.
Cash collections from customers are

• A) $56,000
• B) $52,000
• C) $60,000
• D) $45,000

---

Definitions:

Fixed Cost

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance, remaining constant regardless of business activity volume.

Patent

A legal document granting an inventor exclusive rights to manufacture, use, or sell an invention for a certain number of years.

Demand Schedule

A table that shows the quantity of a good or service that consumers are willing and able to purchase at various prices during a specified period of time.

Marginal Cost

The increase in total cost that arises from an extra unit of production.