How will the amount of cash payments to employees be computed if a company uses the direct method to prepare the statement of cash flows?

Question

Quizplus · Accepted Answer

When using the direct method to prepare the statement of cash flows, the cash payments to employees would be computed by adding salary expense to the decrease in salary payable. This is because salary expense would have been recorded on an accrual basis and therefore, the cash payment made to employees would not necessarily be the same as the amount of expense recognized. The decrease in salary payable represents the cash payment made to employees during the period, which is the information required when using the direct method.

How Will the Amount of Cash Payments to Employees Be