Under the Direct Method of Determining the Net Cash Provided

question 35

True/False

Under the direct method of determining the net cash provided by operating activities on the statement of cash flows,an increase in income taxes payable would be subtracted from income tax expense to convert income tax expense to a cash basis.

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Definitions:

Periodic Instalment

Periodic installment refers to a regular, scheduled payment made over time towards settling a debt, which may include portions of both principal and interest.

Interest Portion

The amount of a payment that goes toward interest on a loan.

Principal Portion

The part of a payment that reduces the original amount of the loan, as distinguished from the interest portion.

Current Liabilities

Financial responsibilities that must be settled within a year or during the standard operational cycle.