On the Statement of Cash Flows Prepared Using the Direct

question 20

Multiple Choice

On the statement of cash flows prepared using the direct method, cash from customers would be sales plus

• A) an increase in accounts receivable
• B) an increase in accounts payable
• C) a decrease in accounts receivable
• D) a decrease in accounts payable

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Definitions:

Governmental Entities

Organizations that operate on the government's behalf, including departments, agencies, and authorities, responsible for implementing policy and managing public sector resources.

Accounting Principles

Accounting Principles are the rules and guidelines that companies must follow when reporting financial data, ensuring consistency, reliability, and comparability of financial statements.

GASB

The Governmental Accounting Standards Board, an organization that establishes accounting and financial reporting standards for U.S. state and local governments.

Financial Statements

Records that outline the financial activities and condition of a business, person, or other entity.