Each of the Following Transactions Would Be Classified as Either

question 104

Multiple Choice

Each of the following transactions would be classified as either an investing or a financing activity except

• A) investments in stock are purchased.
• B) a bank loan is obtained.
• C) stock is issued to acquire land.
• D) dividends are paid.

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Definitions:

FIFO Method

First In, First Out, an inventory valuation method that assumes the items purchased or produced first are sold first.

Equivalent Units

A concept used in cost accounting to convert partially completed goods into a number of fully completed units for accounting purposes.

Labor

The human effort, either physical or mental, that is used in the production of goods and services.

Overhead

Indirect costs related to manufacturing or business operations that do not directly tie to a specific product or activity, such as utilities, rent, and management salaries.