Under the direct method of reporting operating cash flows, a company computes the cash outflows for operating activities by adjusting the various expense accounts for changes in certain liability accounts and deferred revenues, and also eliminates certain "noncash" expenses or losses.

Question

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The direct method of reporting operating cash flows involves adjusting expense accounts for changes in liability accounts and deferred revenues, and eliminating noncash expenses or losses to determine cash outflows for operating activities.

Under the Direct Method of Reporting Operating Cash Flows, a Company