How Will a Company Classify Payments to Suppliers on Its

question 54

Multiple Choice

How will a company classify payments to suppliers on its statement of cash flows?

• A)Cash provided from operations
• B)Cash used in operations
• C)Cash provided from investing activities
• D)Cash used in financing activities

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Definitions:

Periodic Inventory System

An accounting method where inventory levels and cost of goods sold are determined at set intervals, typically annually.

Perpetual Inventory System

An inventory management approach where records of inventory levels are updated on a continuous basis as transactions occur.

Merchandise Inventory

Merchandise Inventory refers to the products a company has in stock that are ready to be sold, represented as an asset on the balance sheet.

Cost of Goods Sold

This is the direct costs attributable to the production of the goods sold in a company.