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Home Q & A Board Other Fields Homework Help Business Accounting
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bernie2981 bernie2981
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8 years ago
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 year   End of prior year
Accounts receivable   $115,000   $100,000
Cost of goods sold   520,000   
Sales revenue   850,000   
Accounts payable*   80,000   65,000
Inventory   92,000   110,000
Salary payable   15,500   12,000
Salary expense   50,000   44,000

*Relates solely to the acquisition of inventory

What will appear in the operating activities section related to salaries payable?
A) The increase of $3,500 will be added to salary expense to determine payments to employees.
B) The increase of $3,500 will be subtracted from salary expense to determine payments to employees.
C) The increase of $3,500 will be subtracted from net income.
D) The increase of $3,500 will be added to net income.
Textbook 
Managerial Accounting

Managerial Accounting


Edition: 4th
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nucleinuclei
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bernie2981 Author
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8 years ago
You're such a dedicated member, I very much appreciate the help.

Marking this solved ✓
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