Under the Direct Method, Cash from Customers Would Be Sales

question 155

Multiple Choice

Under the direct method, cash from customers would be sales plus a(n) :

• A) Decrease in accounts payable.
• B) Increase in accounts payable.
• C) Decrease in accounts receivable.
• D) Increase in accounts receivable.

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Definitions:

Indirect Costs

Costs that are not identified with or traced to a cost object.

Cost Drivers

Factors that cause a change in the cost of an activity, ultimately affecting the overall expenses associated with production or operations.

Janitorial Services

Professional cleaning and maintenance services performed in office buildings, schools, hospitals, and other facilities.

Support Department Costs

Expenses related to departments that do not directly engage in manufacturing but provide essential support to production departments, like maintenance and administration.