Bird Brain Co

question 69

Multiple Choice

Bird Brain Co. reported net income of $45,000 for the year ended December 31, 2018. January 1 balances in accounts receivable and accounts payable were $23,000 and $26,000 respectively. Year-end balances in these accounts were $22,000 and $28,000, respectively. Assuming that all relevant information has been presented, Bird Brain's cash flows from operating activities would be:

• A) $48,000.
• B) $44,000.
• C) $46,000.
• D) $45,000.

---

Definitions:

Noncurrent Asset

Assets intended for use over a long term, such as property, plant, and equipment, that are not expected to be converted into cash within a year.

Direct Write-Off Method

The direct write-off method is an accounting practice of charging unpaid debts directly to expense when they are deemed uncollectible, bypassing the allowance for doubtful accounts.

Accounts Receivable Turnover

A financial ratio indicating how many times a company's receivables are collected, or turned over, during a reporting period.

Bad Debt Expense

An expense account reflecting amounts that are expected to be uncollectible from customers' credit sales.