Which of the Following Statements Is False

question 13

Multiple Choice

Which of the following statements is false?

• A) Income from investments accounted for using the equity method doesn't create cash flows.
• B) Dividends received from stock investments accounted for using the equity method don't create net income but do create cash flows.
• C) Sale of stock investments is a cash inflow from investing activities.
• D) Dividends received from stock investments increase cash flows from investing activities.

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Definitions:

Labor

The human effort (physical or mental) contributed to the production of goods and services.

Overhead

Overhead refers to the indirect costs associated with running a business, such as rent, utilities, and administrative expenses, that are not directly tied to the production of goods or services.

Overhead Costs

Indirect expenses related to the day-to-day running of a business, such as rent, utilities, and office supplies, which are not directly tied to production.

Direct Labor Hours

The cumulative hours employees engaged in manufacturing products or delivering services have worked.