During the year, Chappel Engineering Corporation has operating expenses of $51,000. There was an increase in prepaid expenses of $5000 and an increase in accrued liabilities of $7000. What were Chappel's cash payments for operating expenses?
A)$44,000
B)$49,000
C)$56,000
D)$58,000

Question

Quizplus · Accepted Answer

The cash payments for operating expenses are calculated by adjusting the operating expenses for changes in prepaid expenses and accrued liabilities. The increase in prepaid expenses ($5,000) is subtracted from operating expenses, and the increase in accrued liabilities ($7,000) is added. Thus, $51,000 - $5,000 + $7,000 = $49,000.

During the Year, Chappel Engineering Corporation Has Operating Expenses of $51,000