Last Year, Knox Corporation Reported on Its Income Statement Sales

question 38

Multiple Choice

Last year, Knox Corporation reported on its income statement sales of $375,000 and cost of goods sold of $140,000. During the year, the balance in accounts receivable increased $30,000, the balance in accounts payable decreased $25,000, and the balance in inventory increased $10,000. The company uses the direct method to determine the net cash provided by operating activities on its statement of cash flows. Under the direct method, cost of goods sold adjusted to a cash basis would be:

• A)$105,000
• B)$125,000
• C)$175,000
• D)$155,000

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Definitions:

Absolute Thresholds

The minimum stimulus intensity required to be perceptible to the senses.

Sensory Adaptation

The process by which sensory receptors become less sensitive to constant stimuli over time, reducing our awareness of them.

Subliminal Persuasion

A method of influence that operates below the level of conscious awareness, where stimuli are used to affect an individual's thinking or behavior without them being aware of it.

Transduction

The process by which sensory stimuli are converted into signals the brain can interpret, beginning the process of perception.