Ingles Corp

question 17

Multiple Choice

Ingles Corp., a private company reporting under ASPE, engaged in the following transactions. For each transaction, indicate where, if at all, it would be classified on the statement of cash flows. Assume the indirect method is used. Ingles Corp. experienced a payment of interest on a long-term bank loan in the

• A) operating activities section.
• B) investing activities section.
• C) financing activities section.
• D) does not represent a cash flow.

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Definitions:

Variable Costing

A costing method that includes only variable manufacturing costs (direct materials, direct labor, and variable manufacturing overhead) in product costs and treats fixed manufacturing overhead as a period expense.

Generally Accepted Accounting Principles

A set of accounting standards, guidelines, and procedures used in the preparation of financial statements to ensure consistency and transparency.

Stockholders

Individuals or entities that own shares in a corporation, giving them various rights like voting on company matters and receiving dividends.

Cost-Volume-Profit Graph

A visual representation that shows how changes in cost, volume, and profit affect a business.