When Using the Direct Method to Determine the Net Cash

question 31

Multiple Choice

When using the direct method to determine the net cash flows from operating activities, major categories would include:

• A) Cash received from bank.
• B) Cash paid for salaries.
• C) Cash paid for dividends.
• D) Cash paid for equipment.

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Definitions:

Manufacturing Overhead

All indirect costs associated with the manufacturing process, including indirect labor, materials, and factory-related expenses.

Raw Materials

Basic substances in their natural, modified, or semi-processed state, used as inputs for manufacturing finished goods.

Unit Level Cost

Costs that are incurred for every unit of production, such as direct materials and direct labor.

Bottle Labels

Printed materials affixed to a bottle that provides product information, branding, and regulatory compliance details.