Using the Direct Method, Major Classes of Investing and Financing

question 59

True/False

Using the direct method, major classes of investing and financing activities are listed in the operating activities section.

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Definitions:

Cost of Goods Manufactured

The total production cost of goods completed and made ready for sale during a specified period.

Manufacturing Overhead

All overhead costs related to the production process, apart from direct materials and direct labor expenses.

Adjusted Cost of Goods Sold

The cost of goods sold after adjustments for changes in inventory levels, returns, or allowances have been made.

Cost of Goods Available

The cost of goods available represents the total cost of inventory available for sale during a certain period, calculated as beginning inventory plus purchases minus ending inventory.