The Treating of Repayment of Debt as an Expense in the Cash

question 28

Multiple Choice

The treating of repayment of debt as an expense in the cash flow statement is an example of:

• A)The blurring or elimination of the distinctions between assets and liabilities,income and expenses,and cash inflows and outflows.
• B)The underestimation of expenses.
• C)The overestimation of expenses.
• D)None of the above.
• E)Both a and b above.

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Definitions:

Mixed Cost

A cost that contains both variable and fixed cost elements, changing in total with changes in the activity level but not proportionately.

High-low Method

A technique used in managerial accounting to estimate variable and fixed costs based on the highest and lowest levels of activity.

High-low Method

A technique used in cost accounting to determine the variable and fixed components of a cost by analyzing the highest and lowest activity levels.

R-squared

R-squared is a statistical measure that represents the proportion of the variance for a dependent variable that's explained by an independent variable or variables in a regression model.