When Preparing a Statement of Cash Flows, the Sum of Operating

question 36

Multiple Choice

When preparing a statement of cash flows, the sum of operating and investing and financing activities equals the:

• A)net income as reported on the income statement.
• B)change in cash for the period.
• C)ending cash balance.
• D)cash inflow for the period.

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Definitions:

Overapplied Overhead

A situation where the overhead allocated to products or services exceeds the actual overhead costs incurred.

Cost Accounting System

A method of accounting for the collection, recording, classification, analysis, and allocation of direct costs, indirect costs, and overheads to cost units and cost centres for budgeting, controlling, and decision making.

General Accounting System

The underlying system and processes used to record, classify, and report on financial transactions and conditions, ensuring accuracy and compliance with regulations.

Manufacturing Company

A type of business that produces finished goods from raw materials through the use of labor, machinery, and equipment, oftentimes in a systematic and standardized process.