Asked by
Jessica Breeze
on Nov 15, 2024
Verified
Operating expenses other than depreciation expense for the year were $332,000. Prepaid expenses increased by $5,000. Cash payments for operating expenses to be reported on the cash flow statement using the direct method would be:
A) $332,000.
B) $337,000.
C) $327,000.
D) $5,000.
Operating Expenses
Costs associated with running a business's core operations, excluding the cost of goods sold.
Depreciation Expense
The methodical distribution of the expense of a physical asset throughout its expected lifespan.
Cash Payments
Transactions that involve the outflow of cash to settle obligations or purchase goods and services.
- Evaluating and determining cash disbursements and collections through the direct method within different accounts, including operating expenses, salaries, merchandise inventory, and insurance.
- Evaluation of the repercussions of adjustments in working capital items like Prepaid Expenses, Salaries Payable, Accounts Receivable, Inventories, and Accounts Payable on cash operations.
Verified Answer
SJ
Learning Objectives
- Evaluating and determining cash disbursements and collections through the direct method within different accounts, including operating expenses, salaries, merchandise inventory, and insurance.
- Evaluation of the repercussions of adjustments in working capital items like Prepaid Expenses, Salaries Payable, Accounts Receivable, Inventories, and Accounts Payable on cash operations.
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