When Using the Direct Method, How Are Salaries Paid to Employees

question 110

Multiple Choice

When using the direct method, how are salaries paid to employees reported on the statement of cash flows?

• A) Operating activity
• B) Investing activity
• C) Financing activity
• D) Noncash investing and financing activity

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Definitions:

Capital

Capital refers to the financial resources or assets that are available for use in the production of further goods and services, including funds, equipment, and property.

Recognized Standards

Recognized standards refer to established norms, specifications, criteria, or guidelines that are widely acknowledged and accepted within an industry or profession to ensure quality, safety, and efficiency.

Substandard Performance

Inadequate or insufficient performance that fails to meet established or expected standards or criteria in a job role.

Franchise

A business model that allows one to license the rights to operate a business under an established brand and system.