Assume That the Balance of Accounts Payable Does Not Change

question 29

Multiple Choice

Assume that the balance of accounts payable does not change during a period.When preparing a statement of cash flows,an increase in ending inventory over beginning inventory will result in an adjustment to cost of goods sold under the direct approach because

• A)the amount of cost of goods sold is equal to the amount of cash paid for purchases.
• B)consumed inventory is an expense but not a use of funds.
• C)the amount of cost of goods sold on an accrual basis is less than the amount of cash paid for purchases of inventory.
• D)the amount of cash paid for purchases of inventory is less than the amount of cost of goods sold on an accrual basis.

---

Definitions:

Moods

Less intense, longer-lived, and more diffuse feelings.

Interactional Fairness

Fairness that occurs when people feel they have received respectful and informative communication about an outcome.

Communication

Communication is the process of exchanging information, ideas, or feelings between individuals or groups, using various mediums like speech, writing, or gestures.

Outcome

The result or consequence of an action, decision, or process, often measured to determine success or failure.