In a statement of cash flows prepared using the direct method,if wages payable increased during the year,the cash paid for wages would be
A) the same as salary expense.
B) salary expense plus wages payable at the beginning of the year.
C) salary expense plus the increase in wages payable from the beginning to the end of the year.
D) salary expense less the increase in wages payable from the beginning to the end of the year.

Question

Quizplus · Accepted Answer

When using the direct method in a statement of cash flows, if wages payable increased during the year, it means not all the wages expense was paid in cash. Therefore, the cash paid for wages would be the salary expense less the increase in wages payable. This adjustment is made to reflect the actual cash outflow for wages.

In a Statement of Cash Flows Prepared Using the Direct