Which Would Go into the Operating Activities Section of a Statement

question 107

Multiple Choice

Which would go into the operating activities section of a statement of cash flows using the direct method?

• A) Depreciation expense
• B) Cash paid for inventory
• C) Selling of plant, property and equipment
• D) All of the above

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted.

Segment Margin

The amount of profit or loss generated by a specific segment of a business, after deducting direct and allocated expenses attributable to that segment.

Common Fixed Expenses

Expenses that do not vary with the level of production or sales and are typically required to run a business, such as rent, salaries, and insurance.

Variable Costing

A costing method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in the cost of goods sold, treating fixed manufacturing overhead as a period cost.