Which of the Following Transactions Would Be Considered a Financing

question 76

Multiple Choice

Which of the following transactions would be considered a financing activity in preparing a statement of cash flows?

• A) Amortizing a discount on bonds payable
• B) Recording net income from operations
• C) Selling common stock
• D) Purchasing inventory

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Definitions:

Actual Direct Labor Rate

The actual amount paid per hour to workers who are directly involved in the production of goods or services.

Labor Rate Variance

The difference between the actual cost of direct labor and the standard cost, indicating how well the company is managing its labor costs.

Direct Labor Standards

The expected amount of time and wage rate for workers to complete a unit of production.

Labor Efficiency Variance

A measure of the difference between the actual hours worked and the standard hours expected to produce a certain level of output.