Which of These Is a Reason Why a Cash Flow

question 4

Multiple Choice

Which of these is a reason why a cash flow statement could show a negative cash flow from operating activities even though the statement of comprehensive income showed a profit?

• A) an increase in the amount of inventory held
• B) an increase in depreciation charged
• C) a decrease in the amount owing by debtors
• D) an increase in the amount owing by creditors

Recognize the components and calculations related to prime and conversion costs.

Identify the role and responsibilities of managerial positions within an organization.

Distinguish between various costs associated with production, including direct materials, direct labor, and factory overhead.

Comprehend the criteria and purpose for preparing managerial accounting reports.

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Definitions:

Stockholders

Individuals or entities that own shares in a corporation, holding a stake in the company's equity.

Operating Cash Flow

Refers to the amount of cash generated by a company's normal business operations.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, representing the asset's consumption or wear and tear over time.

Interest Paid

The cost incurred for borrowing money, typically expressed as a percentage of the principal, payable to the lender.