162 in a company that uses the direct method to prepare the statement of cash flows 4307925

162 in a company that uses the direct method to prepare the statement of cash flows 4307925

162) In a company that uses the direct method to prepare the statement of cash flows, the amount of cash it uses to purchase inventory is computed as

A) cost of goods sold plus ending inventory.

B) cost of goods sold plus ending inventory, plus beginning inventory.

C) beginning inventory minus ending inventory, minus cost of goods sold.

D) cost of goods sold plus ending inventory, minus beginning inventory.

163) In a company that uses the direct method to prepare the statement of cash flows, the amount of cash it pays to employees is computed as

A) salary expense plus the ending balance salaries payable.

B) salary expense plus the decrease in salaries payable.

C) salary expense plus the increase in salaries payable.

D) salary expense plus the beginning balance in salaries payable.

164) A company uses the direct method to prepare the statement of cash flow computes the amount of cash it receives from customers as

A) cost of goods sold plus ending inventory minus beginning inventory.

B) cost of goods sold minus ending inventory plus beginning inventory.

C) sales revenue plus the decrease (or minus the increase) in accounts receivable.

D) sales revenue minus the decrease (or plus the increase) in accounts receivable.

165) Using the direct method of cash flow, which of the following is a category in the statement of cash flows?

A) Amortization expense

B) Loss on sale of equipment

C) Collections from customers

D) Net income

166) A company uses the direct method to prepare the statement of cash flows. It presents the following amounts on its financial statements:

End of this yearEnd of prior year

Accounts receivable$115,000$100,000

Cost of goods sold560,000

Sales revenue830,000

Accounts payable*77,00067,000

Inventory86,000106,000

Salary payable14,00010,000

Salary expense49,00045,000

*Relates solely to the acquisition of inventory

Which of the following is correct about the accounts receivable in the operating activities category in the statement of cash flows?

A) The increase of $15,000 will be subtracted from net income.

B) The increase of $15,000 will be subtracted from sales to determine cash received from customers.

C) The increase of $15,000 will be added to sales to determine cash received from customers.

D) The increase of $15,000 will be added to net income.

167) A company uses the direct method to prepare the statement of cash flows. It presents the following data on its financial statements:

End of this yearEnd of prior year

Accounts receivable$115,000$100,000

Cost of goods sold560,000

Sales revenue830,000

Accounts payable*77,00067,000

Inventory86,000106,000

Salary payable14,00010,000

Salary expense49,00045,000

*Relates solely to the acquisition of inventory

Which of the following is correct about accounts payable transaction in the operating activities category in the statement of cash flows?

A) The increase of $10,000 will be subtracted from net income.

B) The increase of $10,000 will be added to net income.

C) The increase of $10,000 will be added to purchases to determine payments to suppliers.

D) The increase of $10,000 will be subtracted from purchases to determine payments to suppliers.

168) A company uses the direct method to prepare the statement of cash flows. It presents the following data on its financial statements:

End of this yearEnd of prior year

Accounts receivable$115,000$100,000

Cost of goods sold560,000

Sales revenue830,000

Accounts payable*77,00067,000

Inventory86,000106,000

Salary payable14,00010,000

Salary expense49,00045,000

*Relates solely to the acquisition of inventory

Which of the following is correct about inventory in the operating activities category of the cash flow statement?

A) The decrease of $20,000 will be subtracted from net income.

B) The decrease of $20,000 will be added to net income.

C) The decrease of $20,000 will be subtracted from cost of goods sold to determine payments to suppliers.

D) The decrease of $20,000 will be added to cost of goods sold to determine payments to suppliers.

169) A company uses the direct method to prepare the statement of cash flows. It presents the following data on its financial statements:

End of this yearEnd of prior year

Accounts receivable$115,000$100,000

Cost of goods sold560,000

Sales revenue830,000

Accounts payable*77,00067,000

Inventory86,000106,000

Salary payable14,00010,000

Salary expense49,00045,000

*Relates solely to the acquisition of inventory

Which of the following is correct about salaries payable in the operating activities category of the cash flow statement?

A) The increase of $4,000 will be subtracted from salary expense to determine payments to employees.

B) The increase of $4,000 will be subtracted from net income.

C) The increase of $4,000 will be added to salary expense to determine payments to employees.

D) The increase of $4,000 will be added to net income.

170) A company uses the direct method to prepare the statement of cash flows. It presents the following data on its financial statements:

End of this yearEnd of prior year

Accounts receivable$115,000$100,000

Cost of goods sold520,000

Sales revenue850,000

Accounts payable*80,00065,000

Inventory92,000110,000

Salary payable15,50012,000

Salary expense50,00044,000

*Relates solely to the acquisition of inventory

Which of the following is correct about accounts receivable in the operating activities category of the cash flow statement?

A) The increase of $15,000 will be subtracted from net income.

B) The increase of $15,000 will be subtracted from sales to determine cash received from customers.

C) The increase of $15,000 will be added to sales to determine cash received from customers.

D) The increase of $15,000 will be added to net income.

171) A company uses the direct method to prepare the statement of cash flows. It presents the following data on its financial statements:

End of this yearEnd of prior year

Accounts receivable$115,000$100,000

Cost of goods sold520,000

Sales revenue850,000

Accounts payable*80,00065,000

Inventory92,000110,000

Salary payable15,50012,000

Salary expense50,00044,000

*Relates solely to the acquisition of inventory

What will appear in the operating activities section related to accounts payable?

A) The increase of $15,000 will be subtracted from net income.

B) The increase of $15,000 will be added to net income.

C) The increase of $15,000 will be added to purchases to determine payments to suppliers.

D) The increase of $15,000 will be subtracted from purchases to determine payments to suppliers.

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