Operating Expenses Other Than Depreciation for the Year Were $400,000

question 61

Multiple Choice

Operating expenses other than depreciation for the year were $400,000. Prepaid expenses increased by $17,000 and accrued expenses decreased by $30,000 during the year. Cash payments for operating expenses to be reported on the cash flow statement using the direct method would be

• A) $353,000
• B) $413,000
• C) $447,000
• D) $383,000

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Definitions:

Deductions

Expenses or specific amounts that can be subtracted from one's gross income to reduce the taxable income.

Rate Structure

The system or plan for pricing services, often used in reference to utilities like electricity, water, and telecommunications, outlining how rates vary based on usage levels or time of use.

Tax Base

The measure or value upon which a tax is levied.

Incidence

In economics, the allocation or distribution of a tax's economic burden between buyers and sellers.