When Using the FIFO Method of Process Costing, the Cost

question 3

True/False

When using the FIFO method of process costing, the cost per equivalent unit is calculated by current period costs / equivalent units for work performed this period.

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Definitions:

Indirect Method

A method used in cash flow statements to adjust net income for non-cash transactions and changes in working capital to determine the net cash flow from operating activities.

Statement of Cash Flows

A financial statement that provides an aggregate data regarding all cash inflows a company receives from its ongoing operations and external investment sources, as well as all cash outflows that pay for business activities and investments during a given period.

Operating Activities

Transactions and events that impact the net income of a business, primarily related to its core operations.

Indirect Method

A way of reporting cash flows from operating activities in the cash flow statement, starting with net income and adjusting for non-cash transactions.