Chapter 11, Problem 13MCQ

To determine

Introduction:

Operating expense are the expense the business in selling goods or providing services and managing the company. These are usually dividend into selling and administrative expense and includes item such as adverting expense, salaries and wages, insurance expense, tax expense and deprecation. These expense are recognized when goods are used, not when cash is paid.

To compute:

What is the amount of cash paid for operating expense that Romo would report on its statement of cash flow under the direct method?