Which of the Following Statement Concerning the Statement of Cash

question 31

Multiple Choice

Which of the following statement concerning the statement of cash flows is true?

• A) The statement of cash flows is usually more accurate when using the indirect method.
• B) If the direct method is used, a supplementary schedule reconciling the net income to net cash from operating activities must still be provided.
• C) The statement of cash flows reflects both earnings per share and cash per share.
• D) The statement of cash flows is an optional financial statement for an SEC registered firm.

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Definitions:

Labor Hours

The number of hours worked by employees for the production of goods or services.

Machine Hours

A measure of production or work performed, calculated as the number of hours a machine is operated.

Lease

A contractual agreement where one party (the lessor) allows another party (the lessee) to use an asset for a specified period in exchange for payment.

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the quantity of output produced, representing the average cost per unit of output.