Operating expenses (other than depreciation)for the year were $533,000. Accrued expenses decreased by $50,000. Cash payments for operating expenses to be reported on the cash flow statement using the direct method would be:

Question

Quizplus · Accepted Answer

When accrued expenses decrease, it means the company has paid more in cash than the expenses recognized. Therefore, to find the cash payments for operating expenses, add the decrease in accrued expenses ($50,000) to the operating expenses ($533,000), resulting in $583,000.

Operating Expenses (Other Than Depreciation)for the Year Were $533,000